ICICI Securities: Measuring Contact-Intensity Of Economic Sectors
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ICICI Securities Report
The unlock 3.0 guidelines implemented from August 01, 2020 allowed almost all activities outside containment zones and essential activities within containment zones.
Despite an increasing number of activities being allowed under each version of Unlock, high frequency indicators show that economic activity has plateaued since mid-June.
While a race for Covid-19 vaccine is on, the general consensus in the scientific community is that an effective and safe vaccine may not become available for public use before mid 2021.
Hence, while the government may relax lockdown restrictions further, consumers are likely to voluntarily avoid activities that require heavy human contact.
As a result, we expect economic activity in contact-intensive sectors to remain suboptimal at least for the next two to three quarters.
In this report, we assess sector-wise contact-intensity from two perspectives: contact intensity of final demand and contact-intensity of supply chain.
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