‘Roots of economic recovery deepen as restrictions ease’

With the easing of COVID-19-related curbs by States, the roots of economic recovery deepened in July 2021, ICRA Ratings said in a report.

The unlocking in the country has manifested itself in improving performance across various high-frequency industrial and service sector indicators, mobility and toll collections in July 2021, according to the agency.

“With the further easing of the State-wise restrictions, especially across the southern States, the roots of the economic recovery deepened in July 2021. Despite a normalising base, eight of the 15 high-frequency indicators recorded an encouraging improvement in their year-on-year (YoY) growth in July 2021,” the agency’s chief economist Aditi Nayar said in the report. Moreover, 10 of the 13 non-financial indicators recorded a month-on-month (MoM) uptick in July 2021, although the pace of improvement eased, as expected, from levels seen in June, when State-wise unlocking had commenced, she said. The YoY performance of GST e-way bills, fuel consumption, electricity generation, output of Coal India Limited (CIL), vehicle registrations and domestic passenger traffic improved in July 2021 from June 2021.

The worsening in the YoY performance of some indicators such as output of passenger vehicles (PVs), scooters and motorcycles was primarily due to the base effect, the report pointed out.

Ms. Nayar said July volumes of seven of the 13 non-financial indicators — non-oil merchandise exports, GST e-way bills, electricity generation, CIL’s output, petrol consumption, PV output and rail freight traffic — rose above both their pre-Covid as well as April 2021 levels.