Third wave undoes biz resumption gains since second wave: Nomura
MUMBAI: Foreign brokerage Nomura on Monday said that its Nomura India Business Resumption Index (NIBRI) fell to 102.9 for the week ending January 16 from 107.9 in the previous week, as a result of the disruptions caused by the third wave of the Covid-19 pandemic, with the index now just 3 percentage points above its prepandemic levels.
“There has been an inevitable drop in mobility – with the Apple driving index down 14.4 percentage points, Google retail and recreation mobility 11.1 percentage points lower, and workplace mobility down 1 percentage points from the previous week,” Nomura analysts said.
The labour participation rate fell further to a nine-week low of 39.7% from 40% in the prior week, the brokerage noted, adding that power demand contracted by 0.4% week-over-week after a 2.1% fall in the previous week.
“New daily cases have risen to 2,50,000-2,70,000 in recent days, higher from 1,70,000 last week, with death rates largely stable. Global experience suggests higher caseloads but a shorter duration third wave (trough-peak of around a month),” Nomura said.
The brokerage said that some adverse impacts of the third wave are visible such as a 25% fall in air traffic from approximately 2,800 daily departures.
It further added that railway passenger revenues decreased by around 41%, however, the railway freight revenue has remained stable, indicative of the diverging impact between the industry of contact-intensive services and the goods economy.
“We recently lowered our GDP growth forecast to 3.2% on year-on-year basis in Q1 2022 (from 5.2%), to 7.4% in 2022 (8.5%) and to 8.7% in the fiscal year 2022 (9.2%),” said Nomura.