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Sentiment and Uncertainty Indices from economic news in Colombia

Author

Listed:
  • Rocío Clara A. Mora-Quiñones
  • Antonio José Orozco-Gallo
  • Dora Alicia Mora-Pérez

Abstract

This study introduces an approach for measuring sentiment and uncertainty indices in Colombia through text mining. Economic news from digital media, spanning March 2020 to September 2024, is analyzed using dictionary-based methods and predefined word lists. The constructed indices reflect major macroeconomic events, such as the phased reopening during the pandemic, the national strike in May 2021, and the decline in demand associated with elevated inflation. These indices function as leading indicators and exhibit statistically significant associations with high-frequency economic data. Incorporating news-based sentiment and uncertainty indices improves the precision of nowcasting Colombia’s economic activity using a dynamic factor model. The results indicate that incorporating qualitative, forward-looking news with traditional data enhances the monitoring of short-term economic fluctuations and the identification of turning points. *****RESUMEN: Este estudio presenta un método para medir el sentimiento y la incertidumbre económica en Colombia mediante técnicas de minería de texto. A partir de noticias publicadas entre marzo de 2020 y septiembre de 2024 y empleando metodologías de diccionario basadas en listas predefinidas de palabras positivas y negativas, se construyeron los índices de sentimiento e incertidumbre. Estos índices identificaron episodios macroeconómicos relevantes, como la reapertura gradual tras la pandemia, el Paro Nacional de 2021 y la desaceleración de la demanda en un entorno de elevada inflación. Los índices exhiben propiedades de series adelantadas y mantienen relaciones estadísticamente significativas con variables económicas de alta frecuencia. El análisis empírico muestra que su incorporación en modelos factoriales dinámicos mejora de manera sistemática la precisión en los pronósticos de la actividad económica. Los resultados muestran que la información cualitativa y prospectiva contenida en las noticias complementa los datos tradicionales y fortalece la capacidad para determinar dinámicas de corto plazo y anticipar puntos de inflexión de la actividad económica colombiana.

Suggested Citation

  • Rocío Clara A. Mora-Quiñones & Antonio José Orozco-Gallo & Dora Alicia Mora-Pérez, 2026. "Sentiment and Uncertainty Indices from economic news in Colombia," Borradores de Economia 1340, Banco de la Republica de Colombia.
    • Handle: RePEc:bdr:borrec:1340
    DOI: 10.32468/be.1340
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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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