The Nomura India Business Resumption Index rose to 119.5 for the week ending 13 February from 114.2 in the prior week (19.5 percentage points above pre-pandemic levels). This is a 17.7 pp recovery in the NIBRI from its nadir and almost fully compensates for the third wave losses.

Mobility indicators are returning to pre-third wave levels. Google workplace and retail and recreation mobility rose by 5.6pp and 7.9pp, respectively, from the prior week, while the Apple driving index rose by 18pp. The labour participation rate inched lower to 40.3 per cent from 40.5 per cent, while power demand fell by 1.5 per cent w-o-w as payback from the preceding 13.3 per cent rise.

“Trends in ultra-high frequency data suggest: 1) a more muted impact of the third wave on growth overall; 2) the impact is concentrated among contact-intensive services, and is not broad-based; and 3) growth likely bottomed at end-January and appears set to rebound in February,” Nomura said.

“The muted impact of the third wave suggests some upside risk to our Q1 GDP growth forecast (of 3.2% y-o-y) and higher public capex, easy monetary conditions and services normalisation are also growth tailwinds in the near term. However, tighter global financial conditions, worsening terms of trade, scarring effects on low income households and higher inflation are medium-term negatives,” it added.

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