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6
June 2017
India's
service sector recovered last month due to a faster pace of new business
generation and historically muted inflationary pressure, a key macro-economic
data showed on Monday.
The
seasonally adjusted Nikkei India Services PMI Business Activity Index
registered a higher rate of expansion at 52.2 in May, up from April's 50.2. An
index reading of above 50 indicates an overall increase in economic activity
and below 50 an overall decrease.
The
higher Services PMI coupled with Nikkei India Manufacturing PMI led to an
accelerated growth in overall activity of India's private sector.
Consequently,
the Nikkei India Composite PMI Output Index reached a seven month high of 52.5
last month from 51.3 in April. The Total
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"The
pick-up in service sector growth seen mid-way through the first quarter (FY)
suggests that GDP could expand at a faster rate should growth momentum be
maintained in June, though there are downside perils to this," said
Pollyanna De Lima, Economist at IHS Markit, and the author of the report. The Total Investment & Insurance Solutions
"Despite
accelerating from April, rates of increase in both services activity and new
work are much weaker than typical for India. Moreover, business confidence fell
as a reflection of firms' concerns regarding competitive pressures and
lacklustre demand."
According
to Pollyanna De Lima, the "uninspiring growth" of the manufacturing
sector may prompt the Reserve Bank of India (RBI) to lower the benchmark rate
in order to support the economy.The Total
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