Economic activity up on pent-up demand, may not sustain: Icra – Times of India

MUMBAI: The pick up in economic activity in October is the result of pent-up demand and may not sustain going ahead, domestic ratings agency Icra said on Tuesday.
Multiple fast-paced indicators, including GST collections, have been showing a sharp recovery since October, which has also led many analysts to revise their overall GDP forecasts for the fiscal.
“We caution that the spikes in production seen in the various sectors in October 2020, are an exaggeration of the true recovery on the ground, as they have been driven by a large component of pent-up demand that may not sustain after the festive period is over,” the agency’s principal economist Aditi Nayar said.
The factors which remain to be watched are the pace of government spending in the second half of the fiscal, after the unexpected contraction recorded in the September quarter, she added.
The potential re-imposition of restrictions in one or more states on account of a fresh surge in Covid-19 infections, may temper the momentum of recovery in the coming months, she warned.
The agency said that available trends for early November are suggesting some moderation in these spikes in the ongoing month.
In October, 10 of the 17 high frequency indicators tracked by the agency showed a pick-up, including GST e-way bills where growth accelerated to 21.4 per cent as compared to the year-ago period, as against 9.4 per cent in the preceding September.
The agency, however, said it is “circumspect” about the durability of the spike in GST e-way bills after October.
The 8.8 per cent growth in electricity was driven largely by a favourable base, it said, pointing out that the same was down 13.3 per cent in the year-ago period.
It added that subsequently, the growth in electricity demand has moderated to 5.3 per cent in year-on-year terms during November 1-20.

Speak Your Mind

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Get in Touch

350FansLike
100FollowersFollow
281FollowersFollow
150FollowersFollow

Recommend for You

Oh hi there 👋
It’s nice to meet you.

Subscribe and receive our weekly newsletter packed with awesome articles that really matters to you!

We don’t spam! Read our privacy policy for more info.

You might also like

Big Food vs. Big Pharma: Companies bet on snacking...

The snack aisle is seen during a tour of a new Amazon Go store...

Where are the safest places to travel in 2023?...

From catching Covid-19 to getting caught in a blizzard, traveling can be risky business...

California Shuts Down Indoor Dining Again Amid Surge In...

TOPLINE California is closing down indoor activities again, such as movie theaters and dining,...

With A Second Positive Drug Test, Robinson Cano Sinks...

Current New York Met Robinson Cano had made a...