The pair of sneakers you bought to match the style of Selena Gomez and efforts to roam around in a couple of shops for sneakers are the factors that economists might consider to estimate the economic growth.
They are considering every trivial purchase of yours, from television to egg whites. Economists are preparing a catalogue to predict growth because they have nothing to measure from the last year.
The lockdown led to the contraction of the economy for three successive quarters in 2020. The last quarter of 2021 showed modest growth of 1.6% due to the low base effect, portraying a false image of the country’s recovery.
In the previous quarter, GDP grew by 20.1% from a low base year, but if we measure it against pre-pandemic levels, the growth contracted 9.2%.
June quarter of 2021-22 required a growth rate of 32.3% to achieve the same level of GDP in the same quarter of 2019-20.
Economists are tracking proxy economic indicators such as footwear sales, products and services advertisements, usage of billboards, travel-related searches, fish, poultry and meat purchase, and demand for smartphones to know the strength of the recovery after the pandemic.
GST collection, e-way bills, foreign trade, Purchasing Managers Index are high-frequency alternatives with government-issued data, indicating the pace of economic recovery. But measuring the actual growth is a hindrance due to the distortion caused by COVID-19.
Proxy indicators suggest economic recovery and help to reduce some noise. They might not be accurate at all times, but they give a direction in which country is heading.
Shoes and travel
High footwear sales are an alternative indicator that the customer confidence level is picking up. It shows that people are moving out of their homes after several months of lockdown and restrictions.
Google and Apple mobility data suggests that more people have started visiting transit stations, indicating long-distance travel. There is mobility towards workplaces too.
Google search is a proxy indicator for the service sector. People are searching for flight tickets, holidays, consumer durables, and movie tickets.
All billboards are flashing advertisements. The recovery will probably continue to pace up.
The protein basket- poultry, fish and meat sale is rising, showing stability in rural income. But this is not an accurate indicator because the poultry supply was down due to the avian flu.
There is a switch from pulses and cereals to fish and poultry. But the focus is on smartphone sales in rural areas.
The recovery is biased towards the organized sector and urban pockets. There could be stress among low-income households and SMEs.
The smartphone shipment maintained a powerful momentum as the demand exceeded supply. The ₹20,000 category smartphones saw maximum sales.
Loan collection, credit growth, tractor purchases, farmers income are gaining traction.
We might see double-digit growth in the absence of the third wave and more vaccination coverage.
Ganpati festival showed signs of recovery. There was a voluminous increase in advertisements for products during Diwali.