High frequency indicators point to robust eco recovery, says govt

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NEW DELHI: Most of the high frequency economic indicators in India have surpassed the pre-pandemic levels, barring three – steel consumption, air traffic and domestic auto sales (excluding commercial vehicles) – government sources said. They added that it is in line with the second-quarter GDP estimates, pointing to economic activity being higher than the corresponding period in 2019.
High frequency indicators (HFIs) are being monitored to track the progress of economic recovery in India since the first Covid case was reported in the country in January 2020. Latest information indicates that among 22 HFIs, full recovery has been achieved in respect of 19, as their latest levels in the months of September, October and November, 2021 are higher than their pre-pandemic levels in the corresponding months of 2019, official sources said.
Among the 19 HFIs, there are some indicators where the recovery is way beyond 100%, such as e-way bill by volume, merchandise exports, coal production and rail freight traffic. This suggests that not only the recovery is complete, the economic growth is now gathering momentum over the pre-pandemic levels of output, they added.
Among the three indicators that still remain in the red, chip shortage is being blamed for weak auto sales as the waiting period gets longer. Similarly, air traffic had been affected due to the Covid restrictions, especially on international travel. The weak steel offtake has been attributed to a fall in demand. Based on a pick-up in demand, which now extends to services, as indicated by recent polls for Purchasing Managers’ Index, the government expects the economy to grow at double-digit rates, before getting into a 7% growth mode from 2022.
The recent Omicron variant has, however, raised fresh fears on the economic front in case there is a surge in infections and travel and other restrictions kick in. The sharpest increase is seen in the case of UPI as more and more users take to digital payments. Similarly, a 157% jump in electronic toll collection is also the result of digitisation, which has helped check leakage from the system.

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