In May, India's services sector activities increased further and expanded at their fastest rate in over 11 years, boosted by a significant increase in new business growth, despite input cost inflation reaching a new high, according to a monthly survey released on Friday. The seasonally adjusted S&P Global India Services PMI Business Activity Index increased to 58.9 in May from 57.9 in April, indicating stronger underlying demand and new work inflows.
The services sector had an increase in output for the tenth month in a row. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction. "The liberalisation of the Indian economy has continued to boost service sector growth. In May, business activity increased at its fastest rate in over 11 years, aided by the fastest increase in new orders since July 2011 "Pollyanna De Lima, S&P Global Market Intelligence's Economics Associate Director, noted as much.
According to the survey, the recovery was aided by a significant increase in new business growth as demand recovered following the reopening of the economy during COVID-19 lockdowns. The current figures, on the other hand, continued to show weak global demand for Indian services, with new business from abroad declining in each month since COVID19 began in March 2020. In terms of prices, inflation reached its greatest level in 16-and-a-half years of data gathering. One-fifth of panellists indicated that prices would rise, citing higher food, gasoline, labour, material, retail, and transportation costs.
SBI Research projects Indian economy to grow at 7.5-pc in 2022-23
