PMIs show pick-up in GDP growth in September quarter
However, in September, the momentum flagged a little both in the manufacturing and services sectors
The PMI data suggests that the Reserve Bank of India’s (RBI) cut its policy rate by 25 basis points on Tuesday in spite of a pick-up in the economy in the September quarter.
Private sector economic activity fell back a bit in September, according to the Nikkei India Composite PMI index. The index is a measure of private sector activity in both the manufacturing and services sectors. In September, the momentum flagged a little both in the manufacturing and services sectors. As the chart shows, the seasonally adjusted composite PMI was 52.4 in September, down from the 42-month high of 54.6 in August. A reading above 50 denotes expansion from the previous month.
Nevertheless, Polyanna De Lima, economist at Markit, pointed out ‘Over Q2 FY2016/17, however, the PMI Composite Output Index posted its highest reading since the Jan-Mar 2015 quarter, thereby suggesting a pick-up in GDP growth. This would be welcome by policy makers after the below-expectations figure of +7.1% y-o-y recorded in Q1.’
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