India Services PMI Shows First Expansion Since Pandemic Hit
(Bloomberg) -- Activity in India’s dominant services sector expanded in October for the first time in eight months, supporting a view that a recovery has been picking up since the South Asian economy lifted a lockdown to stem the pandemic.
The Markit India Services PMI SA climbed to 54.1 last month, the highest since February’s 57.5, data published by IHS Markit on Wednesday showed. It’s also the sixth straight month of gains for the services gauge after hitting a record low of 5.4 in April.
A number above 50 suggests activity is in expansion territory and will probably spur overall growth in the final quarter of 2020. Data on Monday showed activity in the manufacturing sector is humming, with the index at a decade high.
“It’s encouraging to see the Indian service sector joining its manufacturing counterpart and posting a recovery,” said Pollyanna De Lima, economics associate director at IHS Markit.
The better numbers pushed the composite index to 58, from 54.6 in September. The services sector accounts for about about 55% of India’s gross domestic product.
A slew of recent data -- from tax receipts to digital payments and fuel sales to factory output -- showed an uptick in October amid the festival season, which is when demand usually gathers pace in the economy.
That could see forecasts for India’s growth being revised by economists, with those surveyed by Bloomberg currently predicting a 4.4% decline in the October-December quarter from a year earlier. The economy shrank by a record 24% in the quarter ended June, the worst slump among major emerging markets.
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