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Business activity touch more than pre-COVID level for first time: Nomura

The recovery from the second wave has been swift, faster than first wave, says report


Business activity rose for the second consecutive week, crossing the pre-pandemic level for the first time since the onset of the COVID-19 disruption in March 2020, a Japanese brokerage said on Monday.

The Nomura India Business Resumption Index (NIBRI), which measures the activity on a weekly basis with the pre-pandemic levels being the base, rose to 101.2 for the week ended August 15, from 99.6 last week.

This is the first time that the activity has breached the pre-pandemic base. The index level had declined sharply in the immediate aftermath of the national lockdown in April last year and rose steadily to be very close to the pre-pandemic levels of March 2020. However, the second wave and the ensuing localised lockdowns dented it again, till it rose after the waning of the infections.

The recovery from the second wave has been very swift: it took the NIBRI nearly 10 months to crawl back towards the 100 mark after the first wave of COVID-19, but less than three months to cross 100 after the second wave, the brokerage said.

The continued rise in NIBRI during July-August suggests a strong sequential rebound is likely in the third quarter, it said, warning that the economy is not out of the pandemic woods yet.

It expects June quarter GDP growth to contract sequentially at 4.3 per cent, but rise 29.4 per cent year-on-year. In 2021-22, the GDP is expected to grow 10.4 per cent in real terms as against a contraction of 7.3 per cent in the previous year.

During the week under review, Google mobility indicators continued their uptick with the workplace and retail and recreation index rising by 1.7 percentage points (pp) and 3.4 pp, respectively, while the Apple driving index fell by 0.8 pp.

Power demand rose by 5.7 per cent as compared to the previous week, while the labour participation rate eased to 40.4 per cent from 41.5 per cent. 


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