Economy shows clear signs of revival in June1 min read . Updated: 05 Jul 2021, 05:41 PM IST
- Replacement demand, increase in inventories, apart from a pickup in demand could be the possible reasons for such an increase
NEW DELHI: India's economic downturn seems to have bottomed out in May, with clear signs of revival in June as per various ultra-high frequency indicators.
SBI business activity index on Monday showed significant improvement in activity since May-end with the latest reading for the week ended 28 June at 91.8. QuantEco’s DART (Daily Activity and Recovery Tracker) Index continued to underpin economic recovery in its sixth consecutive for week ended 27 June, albeit with pace of incremental improvement sobering down in second half of June.
“Robust recovery is visible in weekly vegetables arrival, RTO (Regional Transport Office) revenue collection and Apple mobility index. However, there is slight dip in labour participation rate," SBI said in its report.
SBI said private vehicles sales at the dealership level has increased as visible in various company data. “Replacement demand, increase in inventories, apart from a pickup in demand could be the possible reasons for such an increase. Difficult to separate out which one is more dominant now," it added.
QuantEco said June marked a decisive turnaround in economic activity amid the ebbing of the second COVID wave. “Our DART Index estimates nearly 65% of the loss in economic activity owing to restrictions/lockdown over the months of Apr-21 and May-21 to have been recovered already. The calibrated yet swift opening up by states has enabled this. Looking ahead, for Q2 FY22, we believe that the trade-off between keeping the guard up and regressing into restrictions remains a threat amidst virus variants. In this respect, keeping up with the pace of vaccination seen over last one week and deftly handling vaccine hesitancy can prove crucial," it added.
QuantEco said it holds on to its FY22 GDP growth estimate of 10%. “We are sanguine about sequential growth recovery from Q3 FY22 onwards on the back of accelerated vaccinations, tailwinds from global growth recovery and supportive fiscal and monetary policies," it added.
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