QuantEco's DART (Daily Activity and Recovery Tracker) Index for week ending 9th Jan-22 witnessed a sharp deceleration amidst widening restrictions to curb spread of Omicron infections.
Download ReportDART INDEX: Omicron hits, DART suffers sizeable setback
Economic activity is finally reflecting the widening of COVID led restrictions at the state level. Worryingly, COVID cases continue to see an unabated increase, with daily infections rising to 1.8 lakh (as of 10th Jan-22) compared to ~30k a week ago (on trend basis). The greater transmissibility of the Omicron is underscored by the fact that a similar magnitude of increase in cases had taken nearly a month during the second wave in Apr-21. Such a pace of increase in infections could induce more stringent localised lockdowns in the coming days.
Notwithstanding the faster community transmission of the Omicron variant (vs. Delta), its impact on economic activity is likely to be weaker compared to the second wave amidst low rate of hospitalisation and given that India has achieved a wider vaccination coverage. Further, the tidal rise in cases is being estimated to ebb sharply (basis global experience), perhaps limiting the impact well within Q4 FY22 from a timeline perspective.