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Inflation | Recovery momentum continues in October but at a slower pace: Nomura

Inflation | Recovery momentum continues in October but at a slower pace: Nomura

The Nomura India Business Resumption Index (NIBRI) hit another post-lockdown high of 83.5 for the week ended October 25, signalling a stronger recovery during the month compared to September.

The weekly tracker of indicators of resumption in activity saw a gain over the 81.9% recorded a week earlier, which was downgraded from 82.2%, Nomura said in a note on Monday.

The latest figures brought the average NIBRI reading to 82% for October, carrying forward the momentum of the sharp rise to 80.3% seen the previous month, albeit at a slower pace, it said.

The index had risen by seven percentage points on average in September over August.

The sharp pick up was largely attributed to a rise in mobility, led by workplace mobility inching up three percentage points over the week and retail and recreation mobility rising by four percentage points, the note said.

The labour market also saw improvements with the participation rate increasing to 41.3% after posting a decrease to 40.4% in the week before, it said.

However, power demand continued to decline, recording a 4% contraction over the 0.8% fall seen in the previous week, it said.


While the recovery momentum was aided by a reducing number of daily covid cases, Nomura cautioned of the possibility of another spike on account of the festive season and the upcoming Bihar elections, scheduled through October 28 to November 7.

“While the flattening of the pandemic curve is a growth tailwind, we remain cautious, as the upcoming festive season and Bihar elections could lead to a reversal,” the Japanese brokerage said.

Sequential improvements in multiple indicators such as goods and services tax (GST) collections, GST e-way bill generation, power demand, railway freight earnings and exports have pointed to a bettering prospects for the Indian economy.

Nomura had cautioned against a “faux recovery” restricted to a festive demand-led pick up in various indicators, according to its previous NIBRI report for the week ended October 18.

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