India’s Services Sector Sees February Surge

Swift Summary

• India’s services sector growth accelerated in February due to strong demand and a positive business outlook, leading to increased hiring.
• The economy grew by 6.2% year-over-year last quarter, driven by government and consumer spending.
• The full financial year growth is expected at 6.5%, anticipating urban consumption enhancement.
• HSBC’s India services PMI rose to 59.0 in February from January’s low of 56.5.
• Demand from global markets boosted output growth; foreign orders grew the most in six months.
• Employment expanded considerably as companies hired more staff to meet demand increases.
• Cost price inflation reached a four-month low but charge inflation increased as firms passed costs onto customers.
• Overall Composite PMI rose to 58.8, helped by services sector growth offsetting manufacturing slowdowns.

Indian Opinion analysis

India’s services sector shows resilience with its accelerated growth amid robust demand and optimistic business expectations, indicating an ongoing recovery phase for the economy post-pandemic disruptions. The sustained expansion past the PMI threshold as mid-2021 also suggests enduring stability within this sector.

The notable easing of monetary policy by RBI could provide further momentum as lower interest rates may stimulate investment and spending activities across various sectors. however, the increase in charge inflation indicates cost pressures that might affect consumer affordability if unchecked.

While manufacturing experiences slower growth, the strong performance of services continues driving overall economic improvements—although India needs balanced advancements across sectors for holistic economic strength.

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