India services sector recovers but weak demand
Economic survey data showed that the activity in India's services sector experienced a slight improvement in August, with the Services Purchasing Managers' Index (PMI) rising to 54.1 points from 53.3 in July. However, it remained below the initial estimate of 54.5. Activity continues to be close to its lowest levels in over four years due to weak demand and new business. Despite a slowdown in external demand growth and new business orders, the labor market performed the best in 15 months, with an increase in employment. Meanwhile, companies raised prices to offset rising operational costs amid pressures from rising oil prices and a weak rupee. The Indian economy remains in a moderate growth phase, affected by a slowdown in manufacturing and rising import costs. Growth is expected to be around 6.7% during the current financial year.
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