Economic activity is on the 'verge of normality' after being severely hit by the coronavirus pandemic, said by Japanese brokerage Nomura. It said that India's Gross Domestic Product (GDP) will grow at 13.5 percent in FY22. The Nomura India Business Resumption Index (NIBRI) picked up to 98.1 (provisionally) for the week ending February 14, from 95.9 in the preceding week, Nomura said.
Nomura's estimates are higher than the growth rate pegged by the Reserve Bank of India. The apex bank expects GDP to jump by 10.5 percent in FY22, after contracting by 7.7 percent in FY21. The brokerage said that it expects real GDP to contract by 6.7 percent in FY21 and grow by 13.5 percent in FY22. Nomura said that for the week to February 14, mobility indicators continued to pick up.
Power demand fell by 0.1 percent week-on-week but the brokerage said that this may be likely due to a payback from the stellar 9.6 percent rise during the preceding week. It said that labour participation rate inched down to 40.5 percent from 40.9 percent in the week before.
The brokerage said its proprietary index has been on an uptrend since hitting its trough during the strict lockdown in April last year. "This supports our view that sequential momentum remains positive and that year-on-year GDP growth likely moved into positive territory, at 1.5 per cent in Q4 2020 (from -7.5 percent in Q3) and 2.1 percent in Q1 2021," it said.
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