NEW DELHI: The first full month under the Narendra Modi government’s watch has thrown up possibly the best economic data in a while, bringing cheer ahead of a budget that’s expected to unveil measures aimed at sparking a recovery after a slump that has seen growth stay below 5% for two years in a row.
Services activity rose to a 17-month high in June on the strength of robust order flow, a private survey showed on Thursday, indicating rising optimism in the sector that has a share of more than 60% in the economy. The HSBC PMI rose to a vigorous 54.4 points in June from 50.2 in May, well over the 50-point mark that separates expansion from contraction.
This was the biggest one-month rise in four years in the survey-based index that polled responses from more than 350 service providers. This is the second successive month of expansion after 10 months of contraction.
“After months of subdued activity, the Modi wave has struck the services sector and lifted growth to a 17-month high. New business flows and stronger business sentiment supported the rise. Some of this is simply pent-up demand being unleashed,” said Frederic Neumann, co-head of Asian economic research at HSBC.