Demand during the festival season helped boost three of the eight
high-frequency indicators
India’s
economy showed more signs of a recovery taking hold in October, increasing
the likelihood it will exit a pandemic-induced recession in the final quarter
of this year.
Demand during the festival
season helped boost three of the eight high-frequency indicators tracked by
Bloomberg News last month, while three were unchanged and two deteriorated.
That kept the needle on a dial measuring so-called ‘Animal Spirits’ steady at 5
-- a level arrived at by using the three-month weighted average to smooth out
volatility in the single-month readings.
The steady pace
from a month ago will help the economy alter course, after output likely posted
its second straight quarter of contraction in the July-September period. Data
due Nov. 27 will probably show gross domestic product declined 8.7% last
quarter from a year ago, according to a Bloomberg survey. That, according to
the central bank, will put the country on track for a historic “technical
recession.”
Here are
details from the dashboard:
Business
Activity
Activity in
India’s dominant services sector expanded in October for the first time in eight
months. The Markit India Services Purchasing Managers’ Index climbed to 54.1
last month, the highest since February’s 57.5, amid renewed increase in new
work orders with business optimism also rising. It was also the sixth straight
month of gains for the services gauge after hitting a record low of 5.4 in
April.
Manufacturing
activity continued to expand too, with the purchasing managers index rising to
58.9 -- the highest reading since May 2010, according to IHS Markit. This
helped the composite index climb to 58 from 54.6 in September. Both
manufacturing and services sectors witnessed broad price pressures, which will
likely keep the inflation-targeting central bank from resuming interest-rate
cuts next month.
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