 "Services PMI")
India's services sector showed robust growth in September as a positive demand environment boosted intakes of new business and output volumes, a private survey showed on Thursday.
According to the S&P Global Ratings, India's services purchasing managers' index (PMI) in September was 61. In August it was 60.1. Notably, in September 2022, it was 56.7.
September's expansion in output was associated with effective marketing, favourable demand conditions and strong influxes of new business.
"The latest PMI results brought more positive news for India's service economy, with September seeing business activity and new work intakes rising to one of the greatest extents in over 13 years. Besides demand strength domestically, firms noted higher international sales to Asia, Europe and North America," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
"Moreover, an upturn in business optimism about the year ahead, fuelled by buoyant demand conditions, bode well to further growth across the service sector. Unsurprisingly, job creation was sustained as the business mood improved," De Lima added.
Advertising was also cited as a key factor in boosting sales.
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De Lima, however, added that the possibility of food price fluctuations still persists. Due to this, the Reserve Bank of India (RBI) is unlikely to go for repo rate cuts until early 2024.
"Services charges rose at a softer rate as cost pressures receded to one of the lowest in two-and-a-half years. Although the latter indicates that near-term output price inflation may cool, worries about potential fluctuations in food prices due to El Niño means the RBI is highly unlikely to cut rates until early next year," De Lima said.
