The level of €-coin in December was below the forecast
- €-coin rose in December, to 0.38 (from 0.11 in November). The indicator remained negative from the start of the pandemic to October, when it increased markedly, reflecting the release of a very positive estimate of GDP for the third quarter.
- The performance of the indicator in December reflects the resilience of manufacturing activity, especially in Germany, and the improvement in the expectations of households and firms, while there are signs of weakness coming from the service sector.
- The €-coin indicator developed by the Bank of Italy provides a summary index of the current economic situation in the euro area. The indicator is an estimate of quarterly GDP growth shorn of the most erratic components (seasonal variations, measurement errors and short-run volatility). €-coin is published monthly by the Bank of Italy and CEPR.
- A new version of the indicator has been released, which incorporates some revisions to the database and to the sample on which our estimates are based. More information has been included regarding services – a sector whose importance has increased in terms of value added in the euro area. This is all the more relevant following the outbreak of the COVID-19 pandemic, which has had more serious repercussions for this sector than for the rest of the economy. The starting date for the estimates was moved from January 1988 to January 2000 in order to make the sample more representative, given the significant changes that the economic systems have undergone in recent decades. Some of the time series in the original dataset have been eliminated to reduce the level of detailed information in relation to certain blocks of variables. This is in line with the evidence provided in the literature, according to which the precision of the estimates of common factors models (such as the one on which €-coin is based) is improved by the careful selection of data. Lastly, the new version of €-coin includes the GDP data released by Eurostat 30 days after the reference quarter (the ‘t+30’ estimate) as soon as it becomes available. The historical profile of the indicator is still consistent with the underlying trend of euro-area GDP growth and, at the same time, it improves the sensitivity of €-coin to the economic situation that has developed after the outbreak of the pandemic crisis. With the release of the December 2020 data, the historical series of the indicator calculated according to the new methodology starting from January 2000 is made available.
- Next €-coin release dates: Friday, 5 February and Wednesday, 3 March (provisional).
€-coin and euro-area GDP – December 2020
Source: Bank of Italy and Eurostat.
Note: The €-coin series is based on the real time estimates of the indicator at a given date and hence the series is not revised. On the other hand, the GDP growth rates are calculated on the basis of Eurostat’s most recently published series and do reflect any changes in the historical data.
More information is available at http://eurocoin.cepr.org/