Tracking the COVID-19 crisis through the lens of 1.4 billion transactions

Naturally occurring data held by commercial banks is rich, plentiful, granular, and directly connected to economic behaviour. This makes it uniquely suited to the real-time tracking of economic activity. This not only renders it a means for providing a backward-looking account of how Covid-19 has impacted the economy, but also provides a way to assess the effect of policies with minimal delay.

Since the outset of the crisis, there has been a surge of research on these issues. It is feared that the disruption induced by the pandemic (and the lockdown) will cause an extremely severe recession (Baldwin and Weder di Mauro 2020a, 2020b). There have also been first attempts at assessing the effect of mobility restrictions induced by the lockdown measures (Monras 2020). The most complementary papers are Baker et al. (2020), which uses a sample of financial transaction data from a personal finance application to study spending patterns in the US during March 2020, and Andersen et al. (2020), which uses credit card consumption data from a Danish bank to track the impact of the lockdown in Denmark.

In a recent paper (Carvalho et al. 2020), we use the universe of transactions mediated by Banco Bilbao Vizcaya Argentaria, S.A (BBVA) to build a daily expenditure measure, assessing the ability of transaction data to capture the recent economic dynamics in Spain. Spain has been hit particularly hard by the Covid-19 pandemic. The first confirmed case was seen on 31 January 2020, which was then followed by a gradual diffusion of the disease during February and March, reaching 200,210 confirmed cases and 20,852 confirmed deaths by 20 April 2020. On 31 March 2020, a strict lockdown policy was announced across the whole country and imposed immediately after. We aim to accurately evaluate the effect of these events on expenditure across sectors and geographic areas.

Our main dataset builds up from 1.4 billion individual card transactions. The ‘universe’ of BBVA transactions (be it from the cards issued via the bank, or the Points of Sales terminals it operates) provides a daily account of expenditures. As we document in Carvalho et al. (2020), the long-run time series of expenditures of BBVA accurately tracks private consumption in Spain. Given the metadata associated with each transaction, we are also able to disaggregate the high-frequency national level expenditures data into geographical, sectoral, and online/offline daily expenditures, providing more micro-detail on the unfolding of the crisis in Spain.