Business activity at pre-Covid levels for 2nd week in a row

Business activity in India stayed buoyant for the second week in a row, with the Nomura India Business Resumption Index (NIBRI) rising to 100.8 for the week ended August 22. The index was at 100.1 in the preceding week. Nomura expects a 2-3 percentage point (PP) rise in the NIBRI as mobility is yet to normalise fully.

“While the NIBRI has reached its pre-pandemic level, Google mobility remains 13-14pp below normal, suggesting further scope for the NIBRI to rise by 2-3pp, once mobility fully normalises,” Nomura said on Monday. It, however, cautioned that the risk of a third Covid-19 wave remains, though August has not seen a flare-up in cases and the vaccination pace has improved to 5.1million doses per day.

As per Nomura’s estimate, economic growth in the second quarter (April-June) contracted sequentially by 4.3%, but rose 29.4% year-on-year compared with the consensus of 20.5%.