Strong demand revives India services PMI in October

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Key Points

Growth in India's dominant services industry picked up last month after dipping to a 10-month low rate in September amid a marked expansion in demand, according to a business survey that also showed the sector's workforce increased sharply...

Services accounted for about 55% of gross domestic product (GDP) in fiscal year 2023-24, government data showed...

"During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation," noted Pranjul Bhandari, chief India economist at HSBC...

Meanwhile, strong demand allowed service providers to hike their prices in response to three-month high cost pressures from increased expenses for food - eggs, chicken, meat and vegetables - as well as labour and transportation...

That increased the risk of inflation rising further in the world's most populous country after spiking to a nine-month high of 5.49% in September, denting consumers' spending capacity and could encourage the Reserve Bank of India to keep interest rates high...

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