NEW DELHI: In April, India's services sector recorded its fastest expansion in almost 13 years, thanks to robust demand, according to a private survey.
The S&P Global India services Purchasing Managers' Index surged to 62.0, surpassing all expectations in a Reuters poll that had predicted a drop to 57.0.
The growth in services, which accounts for roughly 60% of India's gross domestic product (GDP), presents an optimistic picture for the nation's economic prospects, at least in the short term.
The finance and insurance sectors exhibited the most growth, according to Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. Despite a marginal uptick in employment, most firms claimed they had adequate labour capacity to meet increasing demand.
The input prices index rose to a three-month high, and companies increased their charges at the fastest pace this year. As a result, alongside a brighter economic outlook, rising price pressures suggest that the Reserve Bank of India will prefer to keep its key interest rate unchanged rather than lowering it anytime soon.
Activity in both manufacturing and services remained robust, pushing the overall S&P Global India Composite PMI Output Index to 61.6, the highest level since July 2010.
(With inputs from agencies)
