India's services sector grew at faster pace in Sept, optimism at 9-year
high
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[October 05, 2023] By
Anant Chandak
BENGALURU (Reuters) - Growth in India's dominant services industry
accelerated in September as already robust demand strengthened,
according to a survey that also showed businesses were the most
optimistic in over nine years.
That bodes well for Asia's third-largest economy, which is expected to
be the fastest-growing major economy this fiscal year, defying a global
slowdown trend.
S&P Global's India services purchasing managers' index rose to 61.0 last
month from 60.1 in August, confounding expectations in a Reuters poll
for a dip to 59.5.
The reading was above the 50-mark separating growth from contraction for
a 26th consecutive month.
"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," noted Pollyanna
De Lima, economics associate director at S&P Global.
"Besides demand strength domestically, firms noted higher international
sales to Asia, Europe and North America."
While the new business sub-index - a key gauge of demand - rose slightly
to 61.2 last month, export growth eased to the slowest pace since June
but remained in expansionary territory for an eighth consecutive month.
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That improved business sentiment about the coming 12 months to its
highest since June 2014. Job creation also stayed solid, with firms
continuing to hire for a 16th straight month.
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![](../images/100523PIX/busine75.jpg)
Gig workers wait in line to collect their delivery order outside a
mall in Mumbai, India, August 10, 2023. REUTERS/Francis Mascarenhas/File
Photo
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In an indication that a recent rebound in inflation could be
transitory, input prices rose at the slowest pace since March and
the prices charged index eased to a six-month low as companies
refrained from raising fees too sharply to try and gain new
customers.
"News on prices was also encouraging. Services charges rose at a
softer rate as cost pressures receded to one of the lowest in
two-and-a-half years," added De Lima.
"Although the latter indicates that near-term output price inflation
may cool, worries about potential fluctuations in food prices due to
El Nino means the RBI is highly unlikely to cut rates until early
next year."
The Reserve Bank of India will keep its interest rate on hold at
6.50% until at least April before making a quarter-point cut in the
second quarter, a recent Reuters poll found, around the time when
global peers are also expected to start easing monetary policies.
With manufacturing activity expanding at the slowest pace in five
months but services industry growth robust, the overall S&P Global
India Composite PMI Output Index rose slightly to 61.0 in September
from 60.9.
(Reporting by Anant Chandak; Editing by Kim Coghill)
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