What mobility data tells us about the economy

The Indian economy is “on the verge of normalcy”, if the latest reading of Nomura India Business Resumption Index (NIBRI) was to be taken as an indicator. NIBRI reached 98.1 (provisional value) in the week ending February 14, where 100 signifies the prepandemic level. It was 95.9 the week before that.

“Since its trough in April last year, NIBRI remained on an uptrend through 2020 that continued into Q1 2021 (NIBRI average: 94.7 from 86.5 in Q4 2020), reflecting fewer new pandemic cases,” said a note from Nomura economists Sonal Varma and Aurodeep Nandi.

The note interpreted the improvement in NIBRI as a sign of growing economic momentum, and predicted gross domestic product (GDP) growth of 1.5% in the quarter ended December 2020 and 2.1% in the March 2021 quarter. To be sure, the latest NIBRI numbers also indicate a moderation in the labour participation rate (LPR), which is defined as the share of working age population working or looking for a job. LPR moderated to 40.5% in the week ending February 14, compared to 40.9% in the week before that.

An HT analysis of Google’s community mobility data complements the economic normalisation story being offered by NIBRI.