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India Services PMI: In May 2023, there has been a decline in the activities of the country’s service sector. The Services PMI declined to 61.2 in May from 62 in April. There was a slowdown in the activities of the country’s major service sector industries during May. Apart from this, the Composite PMI for May remained stable at 61.6 without any change on a month-on-month basis. In April also it was at 61.6.
According to the S&P Global India Service Purchasing Managers’ Index, this figure has come and its data shows an indication of the pace of growth of the country’s service sector. The activities of the service sector (India’s services sector growth) are an indication of the kind of environment that is being created in the country regarding the service sector.
Service sector’s major contribution to GDP
The service sector, which has a major share in the country’s economic growth rate, has not been able to achieve growth in the last month at the pace it showed in April 2023. On a month-to-month basis, the Services PMI of 61.2 in May as against 62.0 in April is a bit disappointing, but this was already predicted by the Reserve Bank’s estimates. Due to the change in the inflation data, it was estimated that this time a slight lethargy can be seen in the PMI of the service sector.
What does the economic expert say
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, says that the pressure of inflation continues to be a challenge for service providers. The impact of ever-increasing prices of food production costs, inputs, labor and transportation is being seen on the activities of the service sector.
6.1 percent economic growth rate has raised hopes
The share of the service sector in the country’s economic growth rate is more than 50 percent. Asia’s third largest economy has shown a GDP or economic growth rate of 6.1 percent in the January-March quarter, which is the highest among emerging market economies.
PMI above 50 shows expansion
In the language of Purchasing Managers’ Index (PMI), a score above 50 means that activities are expanding, while a score below 50 indicates contraction.
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