QuantEco's DART (Daily Activity and Recovery Tracker) Index for week ending 6th Mar-22 rose to a record high of 124.5 vs. 122.9 previously.

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Mar 09, 2022

DART index: Economic activity attains a fresh peak

QuantEco’s DART (Daily Activity and Recovery Tracker) Index for week ending 6th Mar-22 rose to a record high of 124.5 vs. 122.9 previously. On a WoW basis, the index climbed up by 1.3% from an upwardly revised 0.4% of last week (prior: -0.7%).

The pace of domestic economic activity recovery has so far shrugged off the geopolitical concerns owing to the Russia-Ukraine conflict. The momentum of recovery from Omicron wave as COVID cases abate, restrictions wane and pent-up demand enlivens has continued into Mar-22. However, downside risks to growth have mounted from the sharp escalation in commodity prices including crude oil. Beginning next week, retail price of petrol and diesel are likely to see staggered revisions upwards, adding to CPI inflation that is already at upper threshold of RBI’s inflation targeting band. The expected widening of trade deficit along with global risk aversion is getting reflected in depreciation pressures on the Rupee. Further, the likely deferment of LIC disinvestment to FY23 will blunt the fiscal impulse that was anticipated in the last month of FY22.

Taking into account these factors, we flag off downside risks to our FY23 GDP growth estimate of 7.5%. To a large extent, the extent of downward revision will depend on how long the ongoing geopolitical tensions simmer and its impact on commodity prices and global growth once the dust settles.