Key economic indicators may be skewed, and perhaps less accurate, as a result of the coronavirus pandemic, according to the International Monetary Fund.
"Accurate and timely economic data are crucial for informing policy decisions, especially during a crisis. But the COVID-19 pandemic has disrupted the production of many key statistics," the fund said in a blog post this week.
The coronavirus disease, formally known as Covid-19, first emerged in the Chinese city of Wuhan last December. It has since infected around 5.8 million people and killed more than 360,000 globally, according to data compiled by Johns Hopkins University.
"Without reliable data, policymakers cannot assess how badly the pandemic is hurting people and the economy, nor can they properly monitor the recovery," read the post written by three members of the IMF's statistics department.
The blog post comes at a time when many countries are releasing data on gross domestic product for the first three months of the year — when the coronavirus started to spread globally. GDP is a broad measure of the size of an economy and is widely watched indicator by governments, central banks and investors.
In the U.S. — the world's largest economy — the White House and Congress use GDP data to plan spending and tax policies. The Federal Reserve also considers GDP numbers when setting monetary policy, according to the country's Bureau of Economic Analysis.
"Business people use these stats when making decisions about jobs, expansion, investments, and more," the BEA said on its website.
This week, several countries are scheduled to release their GDP data, including India, France, Italy, Canada and Brazil.
Disruptions in data
One crucial hurdle in producing reliable and timely economic statistics during the pandemic is the lockdown measures that have kept the staff of national statistical offices at home, said the IMF.
"For example, the calculation of retail prices often requires physical visits to stores but this is currently not possible in many countries," the fund explained.
"Similarly, surveying businesses about their production and investment plans is difficult as many have temporarily shut down or simply do not have the resources to respond to statistical questionnaires," it added.
More accurate and real-time information will help countries continue to respond more effectively to the crisis and start planning for the recovery.IMF blog
Such disruptions would cause data on prices and production — which are critical for monetary policy and fiscal stimulus decisions — to be delayed or estimated based on partial information, according to the IMF.
The ongoing pandemic has also highlighted the importance of frequently updated data that allow policymakers to make "the best-informed decisions," the fund said. Many traditional official statistics "are just not sufficiently up to date to be useful at this time," it added.
Innovative alternatives needed
The IMF said there are ways to overcome those challenges, including using alternative sources of information. For example, missing retail prices due to store closures could be replaced with online prices, it explained.
It noted that some countries have started some of these efforts.
The fund cited the U.K., which started to release weekly bulletins with "new and experimental indicators" including online price indexes and daily shipping data to measure the impact of the coronavirus on inflation and trade.
"The significant data disruptions due to the COVID-19 pandemic require innovative data collection methods and data sources," the IMF said.
"More accurate and real-time information will help countries continue to respond more effectively to the crisis and start planning for the recovery."