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Miguel St. Aubyn analyzes in this working paper the relationship between electricity consumption and economic activity to obtain a quick estimate of the fall in Portuguese GDP resulting from the Covid-19 pandemic.

 

According to the author's calculations, econometric estimates point to an elasticity of electricity consumption in relation to economic activity of about 1.42. Based on this estimate, it is possible to calculate a drop in economic activity in the order of 17.9% (the average of March and May – until the 21st). Considering that most of the effects of the pandemic in Portugal last for two months until the time of writing this working paper (May 21), an approximate estimate for the drop in annual GDP already occurring would be -3% (one sixth of 17.9%). 

Other Publications . Working paper nº 1/2020 . 25 May 2020