Indian services companies continued to report growth of sales and business activity in December. Rates of expansion moderated but were nevertheless marked by historical standards. However, despite robust gains in new work in recent months, companies were able to stay on top of workloads and as a consequence reduced headcounts at the end of 2021. The latest results also showed an improvement in business confidence, although sentiment remained subdued as several firms were concerned about price pressures and the possibility of new waves of COVID-19. Rates of input cost and output charge inflation eased in December, however. Despite falling from 58.1 in November to a three-month low of 55.5 in December, the seasonally adjusted India Services Business Activity Index was still consistent with a marked rate of economic expansion. The upturn was often associated with improving market conditions and accommodative demand.
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