India services PMI jumps to three-month high in Dec: HSBC survey
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Going forward, service providers in India are optimistic about the business outlook. Around 46 per cent of monitored companies expect overall activity to increase this year, and anticipate rises in demand, the launch of new projects and increased advertising, HSBC said.
Earlier, an HSBC survey had shown that India's manufacturing sector growth improved further in December, registering the fastest pace in six months, driven by a strong pick up in new orders.
Accordingly, the HSBC India Composite Output Index – which maps both the manufacturing and services index – stood at 56.3 in December, up from 53.2 in November, registering the fastest pace of expansion since February.
The report further noted that additional workload also led to a rise in outstanding business.
On prices, HSBC said inflation reading eased a little, as rates of input and output price inflation at private sector firms have declined.
"With growth showing signs of recovery and inflation still elevated, the case for a policy rate cut is not yet convincing. However, the RBI has clearly teed up for rate cuts in January-March," Eskesen said.
Inflation as measured by all indices has remained elevated and Wholesale Price Index-based inflation has remained above RBI's comfort zone of 5-5.5 per cent for nearly three years now.
In the mid-quarter monetary policy review on December 18, RBI kept key interest rates unchanged.
It left the short-term lending (repo) rate and the cash reserve ratio – the amount of deposits banks have to park with RBI – unchanged at 8 per cent and 4.25 per cent, respectively.
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