Bengaluru
India’s dominant services industry expanded at the fastest pace in over eleven years in June amid strong demand but stubborn inflation remains a concern as prices charged rose at the sharpest rate in almost five years, a private survey showed on Tuesday.
The S&P Global India Services Purchasing Managers Index rose to 59.2 in June from 58.9 in May, its highest since April 2011 and above the 50-mark separating growth from contraction.
A sharp upturn in demand, increased sales and favourable economic conditions kept the new orders sub-index above the breakeven mark for an eleventh month and drove it to its highest reading since February 2011.
Demand for services improved…supporting a robust economic expansion for the sector over the first quarter of fiscal year 2022/23 and setting the scene for another substantial upturn in output next month, said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
Despite falling to a three-month low in June, input cost inflation remained elevated compared to historical levels due to higher costs for chemicals, food and petrol.
The central bank is expected to raise interest rates again soon after hikes of 50 basis points in June and 40 bps in May to prevent growing inflationary pressure from becoming broad-based.
The overall S&P Global India Composite PMI Output Index was strong at 58.2, slightly down from 58.3 in May as the buoyant services industry offset slower growth in manufacturing. The factory PMI fell to a 9-month low in June.
