June marked decisive turnaround in economic activity: QuantEco

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June marks a decisive turnaround in the economic activity that was lost due to restrictions in different states with recovery of as much as 65% of the lost activity already achieved, said research agency QuantEco.

The Daily Activity and Recovery Tracker (DART) Index of the agency detected expansion in the economic activity in the country for the sixth consecutive week ending June 27, but with the incremental improvement slowing down.

“For the week ending June 27, the index climbed to 87.7 from 83.6 previously, clocking a week-on-week change of 4.9% — the slowest in past five weeks,” said the agency’s weekly report.

50% up

In the weeks ending May 30, June 6, June 13, June 20, the rates of expansion as measured by the DART index were 5.6%, 13.2%, 11.7% and 6.4%.

The agency also observed that the DART index has risen by nearly 50% from its lowest levels but remains ~10% below pre-pandemic baseline of 100 overshot in Feb-21/early March-21.

Unemployment down

At the same time, coinciding with and as an outcome of the restrictions easing in different states, the unemployment rate as measured by the Centre for Monitoring Indian Economy (CMIE) also steadily moved down.

After staying in the double-digits for a number of weeks, the 30-day all-India moving average crept down to single-digit rates on June 25 and has stayed in single digits since then.

Decisive turnaround

QuantEco economist Yuvika Singhal said, “June marks a decisive turnaround in economic activity amidst ebbing of the second Covid wave. Our DART Index estimates nearly 65% of the loss in economic activity owing to restrictions/lockdown over the months of Apr-21 and May-21 to have been recovered already.”

An increase in the E-way bills that are an indicator of the commercial movement of goods in the country and electricity generation led the recovery in the week gone by, said QuantEco. However, railway passenger movement and Apple driving mobility recorded activity above the pre-pandemic levels.

Rail freight

But rail freight recorded a second consecutive week of decline and online restaurant searches, too, registered a dip after a gap of 6 weeks.

The agency’s weekly report said that if the pace of vaccination witnessed over the past one week can be kept up and vaccine hesitancy be overcome, sequential growth recovery is going to take place from Q3 of FY22.

The agency said this financial year GDP would grow by 10%.