Looking back at lockdown: Second Covid-19 wave dims demand recovery hopes

While the lockdown provided a buffer in the initial days of the pandemic, India witnessed the first Covid-19 peak months after easing of restrictions. This easing opened up the economy and all indicators reflect a gradual improvement.

One indicator that captures this is aggregate demand. After unlock, demand improved month-on-month till December, when it hit a speed-breaker. Recovery, which was north-bound, has began looking south in the last few months. And this, even before India realised that it stands at the doorstep of a second—probably more potent—Covid wave.