Tracking economic fluctuations with electricity consumption in Bangladesh

This paper establishes electricity consumption as an indicator for tracking economic fluctuations in Bangladesh. It presents monthly data on national electricity consumption since 1993 and subnational daily consumption data since February 2010. Electricity consumption is strongly correlated with other high-frequency indicators of economic activity, and it has declined during natural disasters and the COVID-19 lockdowns. The paper estimates an electricity consumption model that explains over 90% of the variation in daily consumption based on a quadratic trend, seasonality, within-week variation, national holidays, Ramadan, and temperature. Deviations from the model prediction can act as an indicator of subnational economic fluctuations. For example, electricity consumption in Dhaka fell around 40% below normal in April and May 2020 during the first COVID-19 lockdown and remained below normal afterwards. The later lockdowns, in contrast, had much smaller impacts, in line with less stringent containment measures and more effective adaptation.