The Composite Index of Economic Activity (CIEA), which the BoG relies upon gauging the strength of economic activity, recorded an annual growth of 26.8 percent at the end of the first quarter of 2021 — the highest since December 2019 — compared to a growth of -1.9 percent in the corresponding period of 2020.
According to the Bank’s May 2021 Summary of Economic and Financial data, high-frequency indicators have continued to pick up, reflecting a robust rebound in economic activity in construction, industrial consumption of electricity, among others.
However, business sentiments softened in April 2021 to 96.9 from 97.9 in February 2021, indicating a dip in the sentiments of businesses. That notwithstanding, the level of optimism among business owners is higher than during the height of the pandemic era.
Similarly, consumer confidence softened to 93.2 in April 2021 from 97.1 in February 2021, reflecting heightened concerns among consumers, particularly on recently introduced taxes.
Some economists have pointed out that the decline in both consumer and business confidence was most likely due to the adverse effect of the new taxes, higher petroleum prices, and expected upward review of utility tariffs.
Nonetheless, with the commencement of the second round of covid-19 vaccinations and the expected gradual lifting of remaining restrictions, analysts believe that both business and consumer confidence will rebound.