Our proprietary Daily Activity & Index Tracker (DART) Index for the Indian economy estimates economic activity to have to have flattened out in the week ending 23rd May-21. On a WoW basis, the index contracted by 0.1% i.e., the slowest pace of decline in last 2 months, compared to 6.4% in the previous week (revised up from -5.4%)
The slowdown in the pace of loss of economic activity comes as a respite on the heels of the second COVID wave now in its second week of decline at an all-India level. Looking ahead, just as states entered lockdowns in a staggered way, the exit is likely to be heterogenous come Jun-21. While some states are likely to ease the restrictions on curbs, others may continue to see lockdowns getting stretched well into the next month. However, the magnitude and impact of the second wave along with a widely speculated impending third wave will mean that exit from lockdowns will be guarded and gradual at best. As such, we expect growth recovery to look more U-shaped in FY22 versus V-shaped in FY21 (among other reasons).
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