Economic activity rises to near pre-pandemic level, report says
Economic activity saw a massive jump over the past week, according to the Nomura India Business Resumption Index (NIBRI). The index stood at 99.4, up from 94.0 the previous week. It has surpassed the pre-second wave peak of 99.3 in mid-February and is nearing the pre-pandemic level of 100. The growth has been attributed to stagnation of coronavirus cases and higher mobility of people.
'Index regains its mojo after fatigue'
"Nomura India Business Resumption Index regains its mojo after fatigue in the past two weeks," Sonal Varma and Aurodeep Nandi, economists at Nomura India, said in a note, as per reports.
How is the Nomura index calculated?
Nomura India Business Resumption Index is compiled using data from several trackers, such as Google, Apple index, and electricity demand. Google workplace, retail and recreation, and Apple driving index rose by 7.4 percentage points, 5.3 percentage points, and 6.7 percentage points, respectively, according to the latest data released today. Further, power demand increased by 5.3% week on week after falling for three straight weeks.
Labor participation rate also jumped to 41.5%
Meanwhile, labor participation rate also jumped from 39.8% to 41.5%, meaning that more people are looking for jobs. This has pushed the unemployment rate up to 8.1%. The report has cited stagnated daily COVID-19 cases (40,000 infections a day) and nearly five million daily vaccinations behind the optimistic trends. "Vaccination pace is higher than the daily rate of 3.9 million in June," it said.
NIBRI continues to 'monitor risk of a third wave'
The data, however, varies widely from state to state, depending on the coronavirus situation and ensuing curbs. "Overall, the latest rise in the NIBRI corrects its plateauing since mid-July, and suggests the swifter-than-expected recovery from the second wave slump has continued in early August. Whether the surge in mobility, in turn, triggers a third wave is a key risk that we continue to monitor."
