Stating that news on the pandemic has been mixed, Nomura cautioned that a potential third wave cannot be ruled out, especially with the festive season approaching.
“The NIBRI has now been above pre-pandemic levels for three consecutive weeks,” Nomura said in a report.
As per the report, the Google retail & recreation and Apple driving indices rose by 0.6pp and 10pp, respectively, although workplace mobility surprisingly fell by 3.7pp. Power demand rose by 0.1% w-o-w (sa) after a 3.4% contraction last week, while the labor participation rate inched up to 40.8% from 40%.
On the pandemic front, the 7-day moving average of Covid-19 cases rose by around 9,200 from last week to around 41,000 although this deterioration was led by one state- Kerala. On the other hand, the vaccination pace has risen.
“If this pace sustains, India would be on track to fully vaccinate roughly 50% of the population by end-2021. Nevertheless, a potential third wave cannot be ruled out, especially with the festive season approaching,” Nomura cautioned.
Overall, the rapid recovery in NIBRI from the second wave lows suggests that, after a sequential drop in April-June GDP, growth will sequentially rebound in the next quarter. Nomura has maintained its above-consensus GDP growth forecast of 10.4% in FY22.