Amid rising COVID-19 cases, economic recovery continues

Amid rising COVID-19 cases, economic recovery continues

Coronavirus (File Photo: IANS)

New Delhi, Aug 7 (IANS) Most economic indicators have continued to show progress on a week-on-week basis in a clear sign that the worst may be over and there could be a gradual but sustained pick up from here on. As per an analyst, electricity which is one of the main indicators of health of an economy, has shown dramatic upturn reducing the margin of fall in July from sharp deceleration in the months of April and May. Also, Google mobility data has seen slight improvement lately as cars and two-wheeler registrations in the first half of July were two-thirds of FY-2020 average. Despite the total COVID-19 cases in the country going past two million, reduction in the geographical spread of Covid-19 has futher strengthened the gradual improvement in the country's economy. According to an analysis done by Kotak Institutional Equities, several high frequency indicators have shown recovery in the past week. Accordingly, electricity consumption has been higher once again, compared to a similar period in 2019. Though, electricity consumption gap remained negative (- 1%), India consumed more electricity over the past week. Five out of ten states, the brokerage tracked, saw higher electricity consumption in the past week compared to a similar period in the previous year. Moreover, daily average cars and two-wheeler registrations in first half of July were two-thirds of FY-2020 daily average. The movement of traffic and the congestion levels in the metros have increased this month while the daily average of number of e-way bills generated in July were highest of any month since the start of the pandemic. E-way bill indicates the movement of transport across the country for delivery of goods. The brokerage said that excess time spent at home dropped over the past week, according to Google mobility data. There was also an increase in the time spent in grocery shopping while the excess time at workplace remained essentially flat. Bengaluru, Mumbai and Pune congestion levels increased while New Delhi traffic congestion was flat as compared to previous week. Also, container traffic increased at JNPT in July, though it was still considerably lower than pre-Covid levels. Railway freight volumes were flat in July after increasing in May and June. According to KIE, the daily average of property registrations in Maharashtra in July was lower than the daily average of March 2020, but has reached 73 per cent of FY-2020 levels. 'Digital India' goals have also seen a boost in the month of July as daily average UPI and IMPS transaction values have recorded an all-time high in July. Petroleum consumption is another proxy of economic activity. Monthly data shows that consumption of motor spirit (petroleum) in June was already back to March 2020 consumption level. The consumption of high-speed diesel in June was above the March consumption level. However, the consumption of petro-products is still well below normal levels (FY2020 average). "...we do see early signs of stagnation (and reversal) though. As evidence from other countries suggests, the road to recovery will not be a straight line, especially as long as the daily case count continues to increase," the brokerage said.

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