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The Nomura India Business Resumption Index (NIBRI) fell to 61.9 for the week ending May 16 from 66.1 in the prior week (38.1 pp below pre-pandemic levels). It is now at levels last seen in June 2020 after having fully recovered in February.
The drop continues to be driven by a sharp fall in mobility. Google’s workplace and retail & recreation mobility indices fell by ~5pp and 8.4pp, respectively, from the prior week, while the Apple driving index fell by 3.4pp.
Power demand continued to fall by ~4 per cent week-on-week for the fourth consecutive week. The labour participation rate moderated to 40.5 per cent from 41.3 per cent last week, with the unemployment rate rising to 14.4 per cent from 8.7 per cent.
“Rolling state-wide lockdowns appear to be moderating caseloads, but at the cost of mobility. With restrictions having been extended through end-May, we expect more pain in the pipeline. However, international experience suggests GDP growth is less sensitive to lower mobility during the second wave. We maintain our 2021 GDP growth forecast, which we recently reduced to 9.8 per cent y-o-y from 11.5 per cent (FY22: to 10.8 per cent from 12.6 per cent), as we expect a localised hit in Q2, while medium-term tailwinds (vaccine pivot, global recovery, easy financial conditions) are likely to remain intact,” Nomura said.
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