A weekly index of economic activity to monitor the impact of COVID-19 in Rwanda

Abstract

This paper discusses a weekly index of economic activity developed to track the economic impact of COVID-19
in Rwanda. The index is computed as a common component extracted using the principal component analysis from a
number of high frequency indicators representing various economic sectors. The paper describes how these indicators were
used to track the economic impact of COVID-19 in Rwanda, assisting policymakers in making appropriate decisions
aimed at protecting the population and slowing the spread of the pandemic while minimizing the potential negative
economic impact. The study demonstrates the extent to which the COVID-19 pandemic had a detrimental effect on
Rwanda’s economic activity and the speed at which it recovered once the pandemic was contained and temporary
restrictions were lifted.