India's Business Activity Continues Strong Growth Streak in August, Services Industry Leads the Way - Indradip Ghosh
India's economy remains on a solid growth path in August, with the services sector outperforming the manufacturing sector, according to a recent survey. This trend indicates that India is poised to maintain its position as the fastest-growing major economy in the coming quarters, despite global economic slowdown concerns.
The latest data from HSBC's flash India Composite Purchasing Managers' Index, compiled by S&P Global, shows a slight dip to 60.5 in July from the previous month. However, this still reflects over three years of expansion, marking the longest growth streak since 2013.
Chief India economist at HSBC, Pranjul Bhandari, noted that while new order growth in manufacturing slowed, overall demand remained strong. The services PMI index rose to 60.4 in August, indicating continued robust growth in the sector.
Although there are signs of easing price pressures, with input costs rising at a slower pace and output prices increasing at a moderate rate, concerns around inflation and competition have led to a decline in business confidence for the next 12 months.
India's retail inflation fell to a near five-year low in July, driven by a high-base effect. However, experts caution that this slowdown in price rises may be temporary, urging the Reserve Bank of India to remain vigilant.
Analysis:
India's economy is showing resilience and continued growth, with the services sector leading the way in August. Despite some slowdown in manufacturing expansion, overall demand remains strong. Easing price pressures and lower retail inflation are positive signs, but concerns around inflation and competition could impact business confidence in the future. Investors should keep an eye on these developments as they can have implications for their investment decisions and financial planning.