India's Service Sector Contracts On Weak New Work

India’s service sector contracted further in December reflecting a steeper reduction in incoming new work, survey data from IHS Markit showed Wednesday.

The Nikkei services Purchasing Managers’ Index rose slightly to 46.8 from 46.7 in November. However, a reading below 50 indicates contraction in the sector.

Activity has dipped for second successive month in December. The downturn was broad-based by sub-sector, with hotels and restaurants firms the worst performers.

Activity across the private sector economy as a whole slid to the greatest extent in over three years. The composite PMI dropped to 47.6 in December from 49.1 in November.

Panel members widely blamed the deterioration in economic conditions on the rupee demonetization, with concerns towards the speed of the recovery weighing heavily on sentiment.

Combined with the manufacturing PMI, data suggest that Indian GDP is set to grow in the third quarter of FY16/17, but a slowdown is likely, Pollyanna De Lima, an economist at IHS Markit, said.

The material has been provided by InstaForex Company – www.instaforex.com

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