India's Services Surge: PMI Hits Five-Month High

In a promising sign for the Indian economy, the country's services Purchasing Managers' Index (PMI) soared to a five-month peak of 58.8 in April, up from 57.5 in March. This rise suggests a robust recovery in both output and new orders, primarily driven by a surge in domestic demand amid geopolitical tensions in the Middle East.

Chief India Economist at HSBC, Pranjul Bhandari, explained that while external demand faltered, the shift towards domestic consumers has helped sustain growth. Input costs remained high, particularly due to rising expenses for essentials like food and gas, but companies managed these challenges by only moderately increasing their selling prices.

The buoyant conditions also encouraged a notable increase in hiring, as service firms brought in more short-term staff to manage new business volumes. Despite the positive momentum, broader concerns, including the ongoing conflict in the Middle East, kept optimism in check. Nonetheless, the composite PMI increased to 58.2, underscoring a solid expansion in both manufacturing and services sectors.

(With inputs from agencies.)