India’s COVID recovery baffles scientists as consumers return to shops

Life in India appears to be rapidly returning to normal as COVID infections plummet from their peak last year – and consumers are making up for lost time with some of the country’s biggest retailers reporting busy stores, big jumps in sales, and bumper profits.

Daily cases of COVID hit almost 100,000 a day last September – now the transmission rate is down nearly 90%. Daily reported deaths from the virus, which reached over 1,000 a day last year, are now down to fewer than 100. Some scientists question the numbers, pointing to an underreporting of cases and low rates of testing. But the effect on consumers – and businesses – is indisputable.

The details

• Domestic travel is up and there is growing demand for energy, including electricity –an important marker for an economy revived. 
• Some of the country’s biggest businesses are reaping the rewards of consumers’ pent-up demand, reporting rises in sales and a return to profit in Q4 last year, Bloomberg finds. Unilever reported a 20% rise in sales, and Reliance Industries posted record profits.
• Global brokerage Nomura’s India Business Resumption Index (NIBRI) showed business activity was almost back to pre-pandemic levels in the first week of this month. “Overall, ebbing pandemic risk suggests that the ‘vaccine pivot’ in activity might be under way without waiting on the vaccine, leading to faster normalization,” the company said.

Top takeaway

Government economists now forecast 11% growth for the financial year that starts on April 1 – more than enough to make up for the 7.7% contraction in 2020.

Sourced from the Economic Times, Bloomberg