India’s service sector experienced its fastest growth in five months in August, driven by an uptick in new business and increased demand. The S&P Global India Services PMI (Purchasing Managers’ Index) rose to 60.1 in August from 57.2 in July, marking the 25th consecutive month of expansion. A PMI above 50 indicates growth, while a reading below 50 signals contraction.
Source:- news 18
This acceleration in growth was fueled by a significant rise in new orders and a boost in business activity. Domestic demand was a major driver, with firms reporting higher client numbers and improved market conditions. Export orders also grew, although at a slower pace. Businesses indicated that robust demand allowed them to pass on higher input costs to customers, maintaining profit margins. Input costs increased primarily due to rising wages, fuel prices, and raw material costs.
Source:-BBC news
The employment sub-index showed marginal job creation, with firms hiring more staff to handle the increased workload. However, this growth in hiring was modest due to ongoing concerns over high inflationary pressures and the potential impact of global economic uncertainties. The sector’s growth outlook remains positive, with businesses expressing optimism about continued expansion over the coming year.
The improved performance in the services sector complements India’s manufacturing sector, which also saw steady growth in August. Together, these trends suggest that India’s economy is on a stable path to recovery, supported by both domestic and external demand. However, inflationary pressures, global economic uncertainties, and rising input costs continue to pose challenges. Analysts suggest that the Reserve Bank of India may remain cautious about interest rate adjustments in the near term to balance growth with inflationary concerns.
Overall, India’s service sector remains a critical engine for economic growth, contributing significantly to GDP and employment. The sustained growth in the sector is expected to bolster confidence in the broader economic outlook for the country.
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