India Crypto Exchange

Best Bitcoin Trading Platform

Inflation | India’s slacking pace of recovery overshadows favourable base effect-driven growth in Apr: ICRA

Inflation | India’s slacking pace of recovery overshadows favourable base effect-driven growth in Apr: ICRA

India’s slacking recovery momentum overshadowed the sharp base effect in April as the second wave of Covid-19 surged through the country causing localised restrictions across states, according to rating agency



While a majority of leading economic indicators showed annual growth due to a massively shrunken base in April last year, most of them were lower than pre-Covid levels, the agency said in a report on Wednesday.

“Notwithstanding the base-effect led spike in growth of many sectoral indicators in April 2021, the slackening momentum, driven by the second wave of Covid-19 infections in India has emerged as a concern,” the report said.

About 14 out of the 15 indicators tracked by ICRA improved in April with substantial gains seen in automobiles output, vehicle registrations, non-oil merchandise exports, Goods and Services Tax e-way bills.

“However, the optimism generated by this trend is limited, as eight of the 13 non-financial indicators in April 2021 remained below their pre-Covid, i.e. April 2019 levels,” said Aditi Nayar, chief economist at ICRA.

This subset included domestic airlines’ passenger traffic, vehicle registrations, auto output, consumption of petrol and diesel, as well as the output of Coal India Limited.

Further, indicators like GST e-way bills, electricity generation, vehicle registrations and rail freight traffic displayed a slowing sequential momentum in April 2021, reflecting the rise in Covid-19 cases and imposition of localised restrictions, the report said.

“The early data available for May 2021 confirms that this trend is continuing, as the lockdowns have both been extended, and spread to other states, to curb the second wave of Covid-19,” Nayar said.

India saw a record-high 4,529 deaths even as daily fresh cases eased to 267,000 in the last 24 hours.

In addition to substantial healthcare expenses related to the Covid-19 treatment and high retail prices of fuels that are expected to squeeze disposable income, the satiation of pent-up demand seen during the festive season last year will further limit demand for consumer durables, according to the report.

“We expect discretionary spending on consumer durables and areas such as home improvements may be limited in the near term, in addition to the expected cut back in spending on contact-intensive services,” Nayar said.

0 0 votes
Notify of
0 评论
Inline Feedbacks
View all comments