The Indian economy began picking up again in June, ultra-high-frequency data shows, although subdued consumer sentiment is expected to slow the pace of recovery in Asia’s third-largest economy. This is because states are gradually easing containments, taking into account the decline in the number of new Covid cases.
The week ending June 13 was at least the third week in a row that economic activity was picking up sequentially, according to three research agency data trackers using a range of data available daily or weekly.
The UBS-India Activity Indicator rose for the third straight week on June 13, after hitting a low in the week of May 23. This is corroborated by QuantEco Research’s Daily Activity and Recovery Tracker (DART) index, which shows a fourth consecutive weekly expansion in economic activity for the week ending June 13. The Nomura India Business Resumption Index also rose and rose in the same week for the third week in a row, led by a strong revival in mobility indicators and higher demand for electricity after falling to its lowest level in 2018 for almost a year on the week of May 23rd.
Mobility indicators such as the Google Mobility Indices, the Apple Driving Index and daily rail passenger revenue all rallied strongly in June. E-freight bills and imports for the first half of June also showed strong growth, underscoring the gradual resumption of economic activity.
“We expect a sequential recovery in economic activity from June onwards. Unlike the V-shaped recovery in 2020, we expect a gradual recovery in India as consumer sentiment remains weak. However, we expect the economic recovery to pick up from the second half of FY22 as consumer and business confidence improve along with the surge in vaccinations and pandemic control, ”said Tanvee Gupta Jain, UBS economist .