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'Growth momentum loses steam in Nov 2021'
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SME Times News Bureau | 17 Dec, 2021
Rating agency ICRA on AFriday said the growth momentum lost steam in
November 2021 on the back of "some satiation" of pent-up demand as well
as supply chain disruptions in parts of south India on account of
untimely rainfall.
"As many as 12 of the 15 lead indicators
recorded a deterioration in their YoY performance in that month,
relative to October 2021. Moreover, the number of indicators surpassing
their pre-Covid levels eased to seven in November 2021 from nine in
October 2021.
"The early data for December 2021 is mildly
positive, and second shot coverage appears set to rise to 61 per cent of
Indian adults by the end of the month. However, it remains to be seen
whether the existing Covid-19 vaccines will offer protection against the
Omicron variant and avert a third wave in India," it said.
The
ratings agency also said that amidst the heightened uncertainty
generated by Omicron, convincing signs of a durable and sustainable
recovery are yet to emerge.
"The YoY performance of 12 of the 15
high-frequency indicators deteriorated in November 2021 compared to
October 2021 suggesting that the growth momentum lost steam, with some
satiation of pent-up demand after the festive season.
"On the
other hand, vehicle registrations, passenger vehicles (PV) output and
non-food bank credit of scheduled commercial banks showed a modest YoY
improvement in November 2021, relative to the previous month."
In
month-on-month (MoM) terms, the agency cited that nine of the 13
non-financial indicators witnessed a decline in November 2021, broadly
reflecting the impact of a higher number of festive-related holidays.
"Moreover,
untimely heavy rainfall in the southern states appears to have led to
supply chain disruptions, weighing upon activity in November 2021. Only
the output of PV and Coal India Lted (CIL), domestic airlines' passenger
traffic and auto retail volumes recorded an improvement in November
2021, relative to the previous month."
"In addition, 'FASTag'
toll collections and retail payments declined in November 2021, after
having reached all-time highs in October 2021, while the mobility for
retail and recreation continued to improve sequentially."
The
trend, the ICRA pointed out, was mixed when compared to the pre-Covid
volumes of November 2019, with seven of the 13 non-financial indicators
recording an improvement in November 2021 and six recording a
deterioration.
"This is weaker than the performance in October
2021, when nine of the 13 indicators were higher than pre-Covid, the
performance of motorcycle output and diesel consumption has slipped to
below pre-Covid levels in November 2021 from above pre-Covid in October
2021.
"Early data for December 2021 reveals that the daily
average generation of the GST e-way bills improved to 2.2 million during
December 1-12, 2021 from the five-month low 2.0 million recorded in
November 2021; however, we don't expect the October 2021 high to be
surpassed."
In addition, merchandise exports have reportedly
expanded by 44.4 per cent in YoY terms during December 1-14, 2021,
although the momentum may slacken in the later part of the month during
the year-end holiday period.
"After a YoY contraction in November
2021, the sales of petrol and diesel of state refiners have grown in
the first half of December 2021.
"Moreover, the YoY growth in
electricity demand rose to 2.9 per cent during December 1-14, 2021 from
2.1 per cent in November 2021 whereas the rail freight growth eased to
5.9 per cent YoY during December 1-10, 2021 from 6.1 per cent in
November 2021," the agency said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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