Economic recovery broadened in Q3FY22, but durability elusive: ICRA


India’s economic activity rebounded in December 2021, even as many sectors continued to trail the performance recorded in October, said ratings agency ICRA on Wednesday.

The quarterly data suggested a modest broad-basing of the recovery in Q3 FY2022, relative to Q2 FY2022, when compared to respective pre-Covid volumes.

“However, the onset of the third wave of Covid-19 has triggered state-wise restrictions, which have expectedly interrupted the momentum in the ongoing month, reiterating that the recovery is yet to attain durability,” ICRA Chief Economist Aditi Nayar said.

Besides, on a year-on-year (YoY) basis, the performance of 10 of the 15 high-frequency indicators improved in December 2021 compared to November 2021.

Regardless, the YoY performance of nine of the 15 high frequency indicators in December 2021 trailed the growth seen in October 2021.

‘FASTag’ toll collections and ‘retail payments’ rose to all-time highs in December 2021, while the monthly mobility for retail and recreation rose above the level of baseline period for the first time since the onset of Covid-19.

Following the fresh uncertainty triggered by Omicron and the associated restrictions, the rating agency expects a status quo on the stance of the Monetary Policy as well as the reverse repo rate in the upcoming meeting of the MPC to be held in February 2022.



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