Impact of COVID-19 on Lesotho’s Consumer Price Index: Evidence from Interrupted Time Series Analysis (ITSA)

Proceedings of ‏The 3rd International Conference on Management, Economics and Finance

Year: 2021

DOI: https://www.doi.org/10.33422/3rd.icmef.2021.02.132

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Impact of COVID-19 on Lesotho’s Consumer Price Index: Evidence from Interrupted Time Series Analysis (ITSA)

Selloane Khoabane and Moeti Damane

ABSTRACT: 

This paper adopts Interrupted Time Series Analysis (ITSA) and monthly time series data from January 2017 to November 2020 to explore the impact of the March 2020 COVID-19 induced national lock down on Lesotho’s Consumer Price Index (CPI) and selected sub-components. The baseline level for CPI during the pre-lockdown period was estimated at 4.61 per cent, per month, on average. The trend in CPI was positive in the post-intervention period and higher than the positive counterfactual trend by 0.002 per cent. The level of CPI declined by 0.004 per cent in the first month of the lockdown, owing to a fall in the level of the housing, water, electricity and gas price index, despite an increase in the food price index. The CPI’s post-intervention trend averaged 0.006 per cent, supported by positive trends in all selected sub-components, the highest being the food price index, at 0.014 per cent. The study concludes that the impact of the COVID-19 lockdown was not large enough to result in a structural break in the long-term CPI series.

Keywords: Lesotho, Consumer price index, COVID-19, Time Series, ITSA.