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Economic activity nears level seen pre-pandemic: Nomura

India’s economic activity reached its highest level, in the first week of August, since the onset of the COVID-19 pandemic last year, as per a business resumption index.

The Nomura India Business Resumption Index (NIBRI) rose to a record high of 99.4 for the week ended August 8, from 94.0 in the previous week, near the pre-pandemic level of 100, and surpassing the pre-second wave peak of 99.3 in February 2021. The Nomura index is compiled using mobility data from Google and Apple, power demand and the labour force participation rate, with February 2020 as the base. While the latest index estimate suggests a swifter-than-expected recovery from the second wave continues, Nomura said the prospect of a surge in mobility triggering a third wave is the key risk to be monitored.

“After briefly plateauing, mobility picked up sharply, with Google workplace, retail & recreation and Apple driving index rising… Power demand also rose 5.3% week on week, after contracting for three consecutive weeks, while the labour participation rate rose to 41.5% from 39.8% previously, pushing up the unemployment rate to 8.1%,” the firm noted.

‘Varied impact’

While COVID-19 cases remain flat at about 40,000 per day, Nomura economists Sonal Varma and Aurodeep Nandi noted that there are State-wide divergences on the sero-prevalence rate, infection cases, vaccinations and the lockdown situation.

“Some States are doubling down on restrictions (like Karnataka and Tamil Nadu), while others like Maharashtra are easing further,” they pointed out.

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