Despite the green shoots, the economy is set for another quarter of sub-par growth, and still in need of support from the government and the central bank heading into 2020.
India’s
economy showed nascent signs it may be turning a corner after six
straight months of anemic activity.
Two
of the eight high-frequency indicators compiled by Bloomberg News
came in stronger in November based on a three-month weighted average
reading, although that wasn’t enough to move the needle on a gauge
measuring overall activity.
The
dashboard measures “animal spirits,” a term coined by British
economist John Maynard Keynes to refer to investors’ confidence in
taking action.
Despite
the green shoots, the economy is set for another quarter of sub-par
growth, and still in need of support from the government and the
central bank heading into 2020. The focus will now turn to the
government’s annual budget due Feb. 1, with Finance Minister
Nirmala
Sitharaman saying she’s working toward improving consumption.
The
dominant services index rebounded last month, driven by higher orders
and strengthening business confidence. The IHS Markit India Services
Purchasing Managers’ Index rose to a four-month high of 52.7 in
November, the first time in three months that the reading has been
above the 50 mark, which indicates expansion. The index is still
below its long-run average of 54.2.
The
manufacturing sector activity also improved in November, resulting in
the composite PMI index jumping to 52.7 from 49.6.
The
surveys showed input cost inflation for the services sector quickened
to a 13-month high, while manufacturing input prices rose marginally.
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