India business activity jumps to pre-Covid levels: Nomura
India’s business activity, which was hammered amid the second wave of the coronavirus pandemic between late March and early July, has recovered to an all-time high as lockdown restrictions ease due to a fall in infections.
As per the Nomura Global Market Research report, the Nomura India Business Resumption Index (NIBRI) rose to 101.2 for the week ended August 15. The index has crossed the psychological mark of 100 for the first time after the introduction of strict nationwide lockdown rules in March 2020 to control the pandemic.
The Japanese financial services firm observed that the recovery from the second wave was swift but said that a risk of a possible third wave looms given the slow pace of vaccinations.
“This supports our more positive growth outlook. We expect April-June GDP growth to contract sequentially by -4.3% quarter-on-quarter (q-o-q), but a year-on-year (y-o-y) rise of 29.4%,” Nomura said.
The NIBRI had fallen to a low of 60.3 in the third week of May 2021.The continued rise in the index during July-August suggests a strong sequential rebound in the September quarter, Nomura said.
As per the Johns Hopkins data, India's seven-day average of daily cases declined to 36,874 as of August 14 from a high of 391,008 cases three months ago.
India has managed to vaccinate about 9% of its population compared with double-digit vaccinations in some other emerging market economies. For instance, Brazil stands at nearly 23.5% in terms of total vaccinated population, while Indonesia stands around 10.5%, and Mexico at nearly 23%.
The Nomura India Business Resumption Index tracks mobility data from Google and Apple, the labour force participation rate, and power demand to provide an indicator for normalization of economic activity in the country.
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