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NEW DELHI: Resumption of business activities in India, which was on course to hit pre-pandemic levels, stumbled ahead of the finishing line in the last week of February amid rising cases of Covid infections in some pockets of the country, said economists at Nomura.
The Nomura India Business Resumption Index (NIBRI) eased to 98.5 for the week ending 28 February from 99.3 the prior week, with activity now at 1.5pp below pre-pandemic levels.
“Rising pandemic cases in a few states have impacted mobility and remain a near-term risk, but the medium-term improvement is still intact,” said Sonal Varma and Aurodeep Nandi, economists at Nomura.
The rise in pandemic cases in Maharashtra impacted mobility in the second half of February. With elections to be held in five states (Assam, West Bengal, Tamil Nadu, Kerala and Puducherry) between 27 March and 29 April, a rise in infection cases outside of a few states is a near-term risk to activity, Nomura said.
In recent days, India has reported a relatively higher number of daily infections, even as vaccination has gathered pace. By Tuesday evening, the country had administered 1.54 crore jabs.
Going by the trend in other countries, the second wave of infection, is not as damaging.
“Second waves in other countries have proven less economically disruptive, and we expect medium-term tailwinds from the lagged impact of easy financial conditions, front-loaded fiscal activism, strong global growth and the ‘vaccine pivot’ point to support real GDP growth of 13.5 per cent y-o-y in FY22,” said Varma and Nandi.
NIBRI comprises Google mobility indices, driving mobility from Apple, power demand and the labour force participation rate. Google mobility and Apple driving indices are based on a 7-day moving average.
The Nomura India Business Resumption Index (NIBRI) eased to 98.5 for the week ending 28 February from 99.3 the prior week, with activity now at 1.5pp below pre-pandemic levels.
“Rising pandemic cases in a few states have impacted mobility and remain a near-term risk, but the medium-term improvement is still intact,” said Sonal Varma and Aurodeep Nandi, economists at Nomura.
The rise in pandemic cases in Maharashtra impacted mobility in the second half of February. With elections to be held in five states (Assam, West Bengal, Tamil Nadu, Kerala and Puducherry) between 27 March and 29 April, a rise in infection cases outside of a few states is a near-term risk to activity, Nomura said.
In recent days, India has reported a relatively higher number of daily infections, even as vaccination has gathered pace. By Tuesday evening, the country had administered 1.54 crore jabs.
Going by the trend in other countries, the second wave of infection, is not as damaging.
“Second waves in other countries have proven less economically disruptive, and we expect medium-term tailwinds from the lagged impact of easy financial conditions, front-loaded fiscal activism, strong global growth and the ‘vaccine pivot’ point to support real GDP growth of 13.5 per cent y-o-y in FY22,” said Varma and Nandi.
NIBRI comprises Google mobility indices, driving mobility from Apple, power demand and the labour force participation rate. Google mobility and Apple driving indices are based on a 7-day moving average.
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