India's manufacturing sector continued to expand at a healthy pace in July, driven by strong domestic demand, according to the final HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global. The PMI came in at 58.1, slightly lower than the preliminary estimate of 58.5 but still well above the 50-mark that separates growth from contraction. Since July 2021, the Purchasing Managers' Index has consistently been above 50, indicating growth for the past 11 years, marking the longest expansionary streak. "India's headline manufacturing PMI showed a marginal slowdown in the pace of expansion in July, but with most components remaining at robust levels, the small drop is no cause for concern," said Pranjul Bhandari, chief India economist at HSBC. Domestic demand, as reflected in new orders and output, continued to grow, albeit at a slower pace. Exports also performed well, rising at the second-fastest rate in 13 years due to strengthening international demand. However, the survey highlighted rising inflationary pressures. Both input and output prices increased, with the latter experiencing the sharpest rise since October 2013. This could pose challenges for the Reserve Bank of India, which is expected to maintain interest rates in August before initiating an easing cycle in the next quarter. Attribution: Reuters Download
