Republic Day 2022, at least in terms of economic activity, is likely to be similar to Independence Day 2021, if the Nomura India Business Resumption Index (NIBRI) is any indicator.
NIBRI fell to 100.5 in the week ended January 23, according to a note issued by Nomura Global Markets Research on January 24. The latest fall in NIBRI is the fourth consecutive one. The index has lost 19.7 percentage points from its all-time high of 120.2 in the week ended December 26. The latest value is close to the NIBRI reading of 100.1 in the week ended August 15.
NIBRI has emerged as one of the most popular high frequency indices of economic activity in the post-pandemic period. It is based on Google mobility indices, Apple driving index, power demand and labour force participation rate. It considers February 23, 2020, as the base for all the series, which means that a NIBRI value of 100 indicates pre-pandemic levels of economic activity.
“Mobility continues to plummet. Google workplace and retail & recreation mobility fell by 10.7 percentage points and 4.4 percentage points, respectively, from the previous week, while the Apple driving index inched 1.7 percentage point higher after a massive 84 percentage point fall over the past two weeks,” a note by Nomura economists Sonal Varma and Aurodeep Nandi said. “As cases stabilise, activity should improve in February/March.”
NIBRI fell sharply from 100.1 in the week ended February 23, 2020, to an all-time low of 44 in the week ended April 26, 2020. It was largely a result of the 68-day long nationwide lockdown imposed from March 25, 2020. It took until February 2021 for NIBRI to come close to the pre-pandemic value of 100 – the reading was 99.3 in the week ending February 21 – but the second wave dragged it down once again. NIBRI’s lowest value in 2021 was 60.3 in the week ending May 23. The second wave peaked on May 9 in terms of the seven-day average of daily new cases.
NIBRI finally crossed the psychological threshold of 100 in the week ended August 15, 2021, and has never dropped below this level, until now. As expected, the economic recovery has followed a similar trend. The Indian economy expanded by 8.4% in the three months ended September and is expected to expand by 9.2% in financial year 2021-22.
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