MUMBAI: Economic activity accelerated further in the week ended September 13, returning almost to pre-lockdown levels, a private tracker released showed. The Nomura India Business Resumption Index, which monitors economic activity normalisation, rose to 81.6 from 79 in the week ended September 6.
Separately, S&P Global Ratings said India’s economy will likely contract 9% in FY21 from a previous estimate of -5%. Still, that was less steep than cuts forecast by its peers following the June quarter’s 23.9% contraction. Both Nomura and S&P sounded warnings about the threat posed to the economy by rising Covid-19 infections. Meanwhile, consumer inflation dipped marginally but was still outside the upper limit of the target range.
“Business resumption defies pandemic and accelerates further in mid-September,” Nomura Global Markets Research said in its weekly report.
The “tracker of the pace of economic activity normalisation has been picking up through August and raced ahead to a post-lockdown high” and is just 18 percentage points below the pre-pandemic normal, the report said. The index was at 82.9 on March 22, just before the lockdown that started March 25. It touched a low of 44.7 on April 26.
“We believe the durability of the recovery remains in question, as rising cases may lead to the re-imposition of localised lockdowns or create more risk-averse consumers, despite current levels of lockdown fatigue,” Nomura said.
