Services sector expands at fastest pace in a year
The HSBC Markit services Purchasing Managers' Index, which gauges business activity from a survey of over 400 companies ranging from banks to hospitals, jumped to 57.5 in January from 55.6.
The services PMI has held above 50, the level that divides growth and contraction, for over a year, even though India appears set to finish the 2012-13 fiscal year with its slowest economic growth rate in a decade.
Services make up over 60% of Asia's third-largest economy. Some of India's top services exports are software, back-office support and banking services.
“Service sector activity continued to pick up pace led by a faster inflow of new business,” said Leif Eskesen, HSBC's chief economist for India and South-East Asia, in a release.
The new business sub-index jumped to 58.3, the highest since August 2011, prompting firms to step up the pace of hiring, although not at a very strong rate.
Although companies were optimistic about the future, the business expectations index fell slightly from December. The survey also showed input and output prices rising at a similar pace to the prior month, though much weaker than a year ago.
Wholesale price inflation eased to a three-year low of 7.18%in December, giving the Reserve Bank of India room to cut its key lending rate by 25 basis points to 7.75% last week.
“Inflation readings held broadly
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