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The Nomura India Business Resumption Index (NIBRI) has registered the steepest fall in over a year to reach 24 percentage points below pre-pandemic normal in the week ended April 25.
“As lockdowns take effect, mobility has experienced a significant hit. We also see signs of the economic pain spreading to the wider economy (power demand, GST e-way bills, railway freight), although the real economic impact still appears small compared to Covid first wave and other indictors (labour force participation rate) have remained resilient. With more States extending restrictions, sequential momentum is likely to remain weak over the next month, hurting GDP growth in Q2 2020,” Nomura said in its latest report.
As of April 25, the NIBRI registered its steepest weekly fall in over a year of 8.5 percentage points (pp) to 75.9 pp, that is, 24pp below pre-pandemic normal. A key reason behind the fall in NIBRI has been the sharp deterioration in mobility indicators in response to the restrictions and cautious consumer behaviour. Google retail and recreation and workplace mobility indicators have fallen 11pp and 13.6pp from the previous week, respectively, much steeper than the last few weeks.
However, the second wave should remain a short-term negative economic shock, localised to Q2 2021, while the medium-term growth outlook remains stable, Nomura added.
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