PMI dips; to remain subdued: HSBC
“Activity in the manufacturing sector kept up the pace in May with output, quantity of purchases and employment expanding at a faster pace. New orders decelerated slightly led by domestic orders,” HSBC chief economist for India and Asean Leif Eskesen said.
Eskesen further cautioned that going ahead a slight moderation in output growth is likely. New orders increased in May but the rate of expansion was slightly weaker than in April as power cuts hampered operations, preventing a faster rise in output.
The economic growth slowed to a 9-year low in March quarter at 5.3 per cent, and 6.5 per cent for the entire 2011-12 fiscal. The manufacturing sector output contracted by 0.3 per cent in January-March 2012 as against rise of 7.3 per cent in the year ago period.
In view of high inflation, Eskesen said, “The RBI does not have a strong case for further rate cuts, which if implemented could add to lingering inflation risks”.
The central bank, in its mid-quarter credit policy on June 18, will take a call on steps to arrest decelerating growth while trying to contain inflation. After showing a marginal decline in March to 6.89 per cent, wholesale price-based inflation rose to 7.23 per cent in April on
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