CBM reply to “Sentiment indicator disregards Covid”

Central Bank of Malta in the Maltese capital; Valletta. (source: Wikimedia Commons/Frank Vincentz)

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Reference is made related to the article entitled “Sentiment indicator disregards Covid”, published in The Malta Business Weekly of 6 August 2020, wherein the unnamed author states that “the economic sentiment indicator drawn up by the European Commission and included in the Central Bank’s Quarterly review would make it seem that Covid never happened. In fact, Covid is never mentioned at all.” 

The Central Bank would like to clarify that the reference with respect to the Bank’s Quarterly Review relates to that of 2020:3 issued on 24 July 2020, and involves the reporting of the European Commission’s Economic Sentiment Indicator for March 2020. Such indicator was constructed on the basis of a survey conducted in the first two weeks of March when Covid was as yet at its very inception, and therefore the timing of such survey could not reflect the impact of the pandemic, which were fully captured in the subsequent survey undertaken in April. It is for this reason that the relevant section in the Quarterly Review makes no reference to Covid, unlike Section 2 of the same issue of the Quarterly Review concerning the discussion on the Bank’s Business Conditions Index (BCI).