S&P Global has released the latest Purchasing Managers’ Index (PMI) results for India’s services sector, which indicate a surge at its fastest pace in 12 years. Strong demand supported the growth, and price pressure eased, making it a positive development for the country’s economy.
According to the report, India’s services PMI rose to 59.4 in February from 57.2 in January, the highest since February 2011, surpassing analysts’ expectations of a drop to 56.2. A PMI above 50 indicates expansion in the services sector in India. This marks the 19th consecutive month of expansion, which is the longest on record since June 2014.
Analysts suggest that the robust expansion in services PMI could give a boost to the Indian economy, which has struggled recently. The GDP growth of India was only 4.4% during October-December 2022, which was 4.6% below analysts’ expectations and lower than 13.5% and 6.5% in the first and second quarters of fiscal 2022-23, respectively.
The slowdown in the Indian economy in the quarter was caused by the Reserve Bank of India’s aggressive move to raise interest rates to curb inflation, affecting consumer spending. However, the recent surge in services PMI could provide a much-needed boost to the economy.
The rise in services PMI was driven by an increase in new orders, particularly from international clients. Additionally, employment growth picked up in the sector, which could be a positive sign for job seekers.