South Africa has recovered 77 percent of its pre-covid activity as of August 9, according to Swiss Private Bank Lombard Odier & Co, which uses big data and data science to track the economy.
The virtually real time percentage, released yesterday, provided some optimism that the economy might be recovering faster than anticipated, as traditional economic data, which is gathered from less immediate information sources, painted a picture of an economy that would take a long time to recover.
Lombard Odier chief investment officer Stéphane Monier said they watched eight “high frequency signals”: import and exports, city congestion levels, mobility data, retail and grocery consumption, workplace presence and air pollution levels for production.
“Taken together, they can give us a picture of the state of an economy’s recovery when compared with a pre-crisis average of three years, or from 2019,” he said.
A big challenge for investors is to gauge progress toward “normalisation”, in comparison with historic levels of supply and demand. As a result, this pandemic is turning into the most powerful test yet for the value of data science, he said.
The data is also compared with other indicators to ensure that the insights add value to the bank’s forecasts.
The pandemic was helping to find new ways to understand economic development ever closer to real time, he said.
South Africa’s central bank (SARB) is penciling in a 7.3 percent gross domestic product contraction this year followed by a 3.7 percent recovery in 2021, with many private sector forecasts projecting an even slower recovery for 2021.
In May and June, the lockdown started being relaxed in phases, with most businesses allowed to be open from today’s Level 2 of the lockdown coming into force, subject to various social distancing and other restrictions.