That said, most analysts now draw some comfort from the fact that economic activity in India is reviving. However, they do caution against the stickiness of this recovery over the medium-to-long term.
After briefly plateauing in June-July, the Nomura India Business Resumption Index (NIBRI) – Nomura’s gauge of the pace of economic activity normalisation in the country – has been picking up through August and raced ahead to a post-lockdown high of 81.6 on 13 September, which Nomura believes is on account of increasing retail and recreation mobility, a higher driving mobility index and higher power demand.
“The continued acceleration in business resumption in August and September occurred alongside an unabated rise in infections, both quantitatively and geographically. 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,” wrote Sonal Varma, managing director and chief India economist at Nomura in a September 14 co-authored report with Aurodeep Nandi.
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