The seasonally adjusted S&P Global India Services PMI Business Activity Index decreased to 54.3 in September, down from 57.2 in August, indicating the slowest rate of growth since March.
According to a monthly poll, Indian services sector activity fell to a six-month low in September, as new business inflows climbed at the slowest rates since March, owing to inflationary pressures and competitive circumstances.
The seasonally adjusted S&P Global India Services PMI Business Activity Index decreased to 54.3 in September, down from 57.2 in August, indicating the slowest rate of growth since March.
The services sector increased output for the fifteenth month in a row. A Purchasing Managers’ Index (PMI) score above 50 indicates expansion, while a number below 50 indicates recession.
“The Indian service sector has overcome many adversities in recent months,” said Pollyanna, “with the latest PMI data continuing to show a strong performance despite some loss of growth momentum in September.”
According to the poll, the upturn was hampered by pricing pressures, an increasingly competitive market, and unfavorable public policies.
Lima also stated that the sharp depreciation of the rupee observed at the end of the month as a result of interest rate rises in the United States presents further hurdles to the Indian economy.
“Currency instability poses renewed inflation worries as imported items become more costly, and undoubtedly means that the RBI will continue hiking interest rates to protect the rupee and contain price pressures,” Lima added.
On September 30, the Reserve Bank of India (RBImonetary )’s policy committee (MPC) hiked the benchmark lending rate, or repo rate, to 5.90%, the highest since April 2019.
The MPC also agreed to keep the accommodating policy stance in place in order to keep inflation within target while boosting growth, according to RBI Governor Shaktikanta Das.
According to Lima, an increase in inflation might harm consumer spending, impair company confidence, and put the Indian service sector to the test in the coming months, but service providers remained optimistic about growth expectations in September.
According to the study, sluggish foreign demand weighed on total sales, with overseas orders falling further in September. Since the commencement of COVID-19, monthly contractions have been reported.
The statistics showed that business confidence is continuing to rise, with sentiment reaching its best level in over seven and a half years.
