India sees 'V'-shaped recovery on resumption in business activity: Nomura
Mobility indicators like Google's workplace, retail and recreation mobility indices, continue to rise
India has witnessed a 'V'-shaped recovery in resumption after the second wave of the pandemic, and business activity is now closing in on the pre-pandemic levels, a report by a Japanese brokerage said on Monday.
The 'Nomura India Business Resumption Index' (NIBRI) accelerated to 96.4 for the week ended on Sunday from 94.9 in the previous week, and is now only 3.6 percentage points (pp) below pre-pandemic levels.
This comes as a positive sign for India’s economy that was shaken time and again because of the pandemic.
Mobility indicators, such as Google's workplace and retail and recreation mobility indices, continued to rise (up 2.4 pp and 5.1 pp, respectively, as compared to the preceding week), as did the Apple driving index (up 3.9 pp).
The brokerage noted that the power demand fell 2.8%, after rising 1.4% in the previous week to pre-pandemic levels. The labour participation rate moderated to 40.4% from 40.6%.
"The first flush of conventional monthly data for June suggest a gradual 'V'-shaped recovery from the nadir in May," the brokerage said according to a PTI report.
In the first half of July, GST e-way bills have moderated to 28.2 million as against 29.9 million in June, railway freight revenues are flat and power demand momentum has eased, but that largely reflects seasonal softness, with underlying activity continuing to improve, it said.
However, the brokerage noted that pace of vaccination has slowed marginally in July thus far to an average run-rate of 36 lakh doses per day as against 38 lakh in June, and the pandemic cases are plateauing at an elevated level of about 39,000 per day.
With mobility continuing to pick up through July and broader vaccination coverage still a quarter away, the key risk to India's growth recovery is the threat of a third wave during this period, it warned.