Economic activity in India was almost 15% above pre-pandemic levels last week, Nomura said, based on its India Business Resumption Index which tracks post-pandemic momentum in the economy.
The index hit a fresh high of 114.5 in the week ending November 28, with mobility returning to almost pre-pandemic levels, Nomura research analysts Sonal Varma and Aurodeep Nandi said in a note on the latest print of the metric that considers February 23, 2020 as the base date for measuring post-COVID-19 activity.
In the previous week, the Index stood at 113.4. “Google workplace and retail & recreation mobility rose by 3.6 percentage points and 1.6 percentage points, respectively, while the Apple driving index eased marginally by 0.5pp. The labour participation rate improved to 40.5% from 39.8% in the prior week, while power demand recovered by 1.2% week-on-week from 0.2% previously,” they said in the note.
Despite the uncertainty triggered by the Omicron variant, Nomura said high-frequency data suggests that the economy remains on a recovery path and inflationary pressures are building up. It, however, expressed concern about the current extent of the fully-vaccinated population in India and its impact on contact-intensive sectors’ recovery.
“Tourism is a relatively small share of the economy but continued normalisation of domestic contact-intensive services is contingent on infection cases remaining low, as only around 32% of the population are fully vaccinated.
“With domestic infection cases continuing to moderate, mobility is almost back to pre-pandemic levels, and this is boosting services. However, border reopening will likely be slow, as the discovery of the Omicron variant globally has prompted the Indian government to review and tighten its international travel guidelines, and several States are on alert,” they pointed out.
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