Continued base normalisation, emerging supply-side constraints and excess rainfall dampened the year-on-year (YoY) performance of most high frequency indicators in India in September 2021, according to rating agency ICRA. In quarterly terms, half of the indicators had recovered above their pre-COVID levels in the second quarter of fiscal 2021-22 (Q2 FY22), an improvement over Q1, when only three of the 14 indicators had bettered their pre-pandemic performance.
Accordingly, the economic recovery widened in Q2 FY22, while remaining uneven and multi-speed, ICRA said in a press release.
The YoY performance of 14 of the 15 high frequency indicators (except non-food bank credit) worsened in September this year compared to August. This was on account of a combination of factors, which also included excess rainfall, in September.
In particular, four indicators reported a YoY contraction and only three recorded a double-digit growth in that month. With a further normalisation of the base, the pace of growth of several indicators may decline further in October, ICRA said.
Moreover, while most indicators witnessed a slowdown in month-on-month (MoM) terms in September, the trend was mixed when compared to the pre-COVID volumes of September 2019. The mobility for retail and recreation and retail payments improved mildly in September 2021 from August the same year in contrast to the easing in FASTag toll collections.
The early data for October 2021 reveals that the daily average generation of the goods and services tax e-way bills remains healthy at 2.2 million, indicating pre-festive stocking. ICRA expects the average for October to surpass the peaks seen in February-March 2021.
