Rise in virus cases eclipses India’s early signs of economic recovery
Loading player...
New Delhi — India’s economic activity monitors are beginning to flatline just months after showing signs of returning to life.
Latest data from Apple and Alphabet’s Google showed mobility suffered in recent weeks after notching up an increase since May, when Asia’s third-largest economy began exiting a nationwide lockdown to contain the coronavirus outbreak. Elsewhere, high-frequency indicators from purchasing managers’ surveys to fuel sales show activity levelling off in July.
And that’s not all. Bank credit shrank 0.8% in the two weeks to July 17 from a fortnight ago, tax collection moderated last month, while a measure of interstate movement of goods traffic by road and rail was little changed. Data from private research firm Centre for Monitoring India Economy shows unemployment rising slightly after some improvement in June and July.
The drop in activity may be directly linked to India’s efforts to fight the virus outbreak. The nation, which is adding more than 50,000 cases daily, is seeing some of its most industrialised states reimposing lockdowns to stop the spread of Covid-19.
India’s exit from the lockdown is not calibrated, said Soumya Kanti Ghosh, an economist with the state Bank of India.
“We have been resorting to unplanned lockdowns that might be acting as a constraint on sustenance of economic activity.”
Shrinking GDP
A slump in factory output eased in June, latest data showed on Tuesday. While the index of industrial production fell 16.6%, the double-digit decline is shallower than the more than 30% contraction seen in May and more than 50% fall in April. That improvement isn’t enough to keep the economy from shrinking in 2020, the first contraction in more than four decades. It is estimated the nation’s GDP will decline 4.5% in the year to March.
The Nomura India business resumption index, which tracks the pace of economic activity, showed a slight improvement in the week ended August 9, but economists led by Sonal Varma said the data points to an uneven recovery and largely reflects pent-up demand.
“However, a second wave of Covid-19 cases, combined with a ‘rolling wave’ in traditionally safer states (in the south and the east), increase risks of protracted quasi-lockdown measures and tempering of sequential improvement in activity once the post-lockdown momentum ebbs,” wrote Varma and Aurodeep Nandi.
India, which hogged TomTom’s 2019 traffic index for congestion, saw fewer jams in July as people cut down on venturing out, showed an ...
Latest data from Apple and Alphabet’s Google showed mobility suffered in recent weeks after notching up an increase since May, when Asia’s third-largest economy began exiting a nationwide lockdown to contain the coronavirus outbreak. Elsewhere, high-frequency indicators from purchasing managers’ surveys to fuel sales show activity levelling off in July.
And that’s not all. Bank credit shrank 0.8% in the two weeks to July 17 from a fortnight ago, tax collection moderated last month, while a measure of interstate movement of goods traffic by road and rail was little changed. Data from private research firm Centre for Monitoring India Economy shows unemployment rising slightly after some improvement in June and July.
The drop in activity may be directly linked to India’s efforts to fight the virus outbreak. The nation, which is adding more than 50,000 cases daily, is seeing some of its most industrialised states reimposing lockdowns to stop the spread of Covid-19.
India’s exit from the lockdown is not calibrated, said Soumya Kanti Ghosh, an economist with the state Bank of India.
“We have been resorting to unplanned lockdowns that might be acting as a constraint on sustenance of economic activity.”
Shrinking GDP
A slump in factory output eased in June, latest data showed on Tuesday. While the index of industrial production fell 16.6%, the double-digit decline is shallower than the more than 30% contraction seen in May and more than 50% fall in April. That improvement isn’t enough to keep the economy from shrinking in 2020, the first contraction in more than four decades. It is estimated the nation’s GDP will decline 4.5% in the year to March.
The Nomura India business resumption index, which tracks the pace of economic activity, showed a slight improvement in the week ended August 9, but economists led by Sonal Varma said the data points to an uneven recovery and largely reflects pent-up demand.
“However, a second wave of Covid-19 cases, combined with a ‘rolling wave’ in traditionally safer states (in the south and the east), increase risks of protracted quasi-lockdown measures and tempering of sequential improvement in activity once the post-lockdown momentum ebbs,” wrote Varma and Aurodeep Nandi.
India, which hogged TomTom’s 2019 traffic index for congestion, saw fewer jams in July as people cut down on venturing out, showed an ...
