India's Services Sector Soars with Strong Demand

In December, India's services sector experienced its highest growth in four months, spurred by strong demand and easing inflation pressures. The HSBC India Services Business Activity Index rose to 59.3. New business inflows supported output growth, employment, and overall positive business sentiment despite a manufacturing slowdown.

India's services sector reached new heights in December, marking the strongest expansion in four months, according to a recent survey. This growth surge, driven by strong demand and easing cost pressures, was reflected in the HSBC India Services Business Activity Index, which climbed to 59.3.

New business inflows significantly bolstered output growth and prompted firms to increase hiring. Despite a mild dip in manufacturing growth, the service providers showed robust confidence in future output growth over the next year.

Economist Ines Lam from HSBC noted the positive impact of softening input price inflation on business optimism, contrasting the services sector's vigor with the deceleration in manufacturing activity. Services PMI outpaced the HSBC India Composite Output Index, driven by a notable increase in demand.

(With inputs from agencies.)