The Indian economy continues to exhibit strong growth in the new year, with the HSBC Flash India Composite PMI Output Index recording a robust reading of 61 in January. The inaugural flash results, released on Wednesday, indicate a significant improvement in the health of the Indian private sector economy, fueled by a sharper upturn in new work intakes.
According to the release, this marks the thirtieth consecutive month of expansion, and the latest figure of 61, rising from 58.5 in December, signifies the sharpest rate of growth since September 2023.
Service providers experienced a more substantial increase in activity compared to manufacturers, but growth accelerated in both sectors. Survey participants attribute the upturn to favorable economic conditions, strong demand, and ongoing improvements in new business inflows. Additionally, the rise in total new business inflows is supported by the most marked increase in international orders since October.
The HSBC Flash India Services PMI Business Activity Index for January stands at 61.2, up from December’s final reading of 59. The HSBC Flash India Manufacturing PMI Output Index also saw a significant rise to 60.5 in January from the December final of 57.4.
Pranjul Bhandari, Chief India Economist at HSBC, commented on the data, stating, “The economy grew at a faster pace in January, led by stronger manufacturing output, as well as more robust business services activity. New orders rose at a faster pace than a month ago, and within that, international orders were stronger than before. Input prices rose quickly, but output prices were raised to a smaller extent.”
This positive economic data arrives amid expectations that growth in the fourth quarter of the fiscal year could slow down, despite a projected overall growth rate of 7.3% for the fiscal year. The release of the HSBC Flash India PMI is one of the last macroeconomic datasets before the presentation of the Interim Budget 2024-25 by Union Finance Minister Nirmala Sitharaman on February 1.
