Business Activity Gains Pace As India Sees Lockdown Fatigue: Nomura  

After a brief plateauing in July, the pace at which economic activity is normalising rose in August and the uptrend continued into early September despite mounting Covid-19 infections.

Nomura's India Business Resumption Index, which tracks business activity on a weekly basis, rose to 77.4 for the week ended Sept. 6 from 75.7 at August-end and 70.3 at July-end, it said in a note. That suggests the lockdown fatigue may have set in.

But "as the number of virus cases continues to rise, within and outside major economic centres, the durability of the recovery remains in doubt", the Japanese research firm said.

India has topped Brazil to be the world's worst-hit nation by the coronavirus after the U.S. as it adds more than 80,000 cases on average every day. Still, the nation announced the fourth phase of lifting lockdown restrictions to revive an economy that's headed for its first full-year contraction in more than four decades. India's gross domestic product saw the steepest contraction in the quarter ended June, prompting Nomura and other global research firms to downgrade the country's growth outlook.

Key Highlights

• The largest upticks were seen in Google retail and recreation mobility and the Apple driving index, while power demand has tapered off.
• The pickup in retail and recreation mobility suggests consumers are stepping out for purchases.
• The labour participation rate rose to 41.2% from 39.5% in the previous week.
• The unemployment rate fell to 7.3% from 8.1%.