India August PMI Shows Modest Growth, RBI Forecast Exceeds 6.7%
NEWZA Editorial Team••Source: MoneyControl
NEWZAFinancial Intelligence Feed
⚡ Key Financial Takeaways
Manufacturing PMI fell to 52.9, services PMI rose to 54.5, composite PMI at 54.6, indicating continued expansion.
RBI projects GDP growth of nearly 7% for FY24, surpassing its earlier 6.7% forecast.
Oil price volatility and Middle East tensions remain key risks, as India imports ~90% of crude oil.
August PMI Snapshot HSBC’s flash PMI survey for August shows India’s economy expanding at a modest pace. The manufacturing PMI slipped to 52.9 from 53.5 in July, while the services PMI climbed to 54.5 from 53.3. The composite PMI edged up to 54.6, a slight rise from 54.3, yet it remains above the 50‑point threshold that signals expansion.
Economic Implications and RBI Outlook Chief India economist Pranjul Bhandari noted that output and new orders rose, but at a slower rate, with cost pressures easing. Firms, however, raised selling prices faster, hinting at stronger pass‑through. Deputy Governor Poonam Gupta announced at a Chennai event that India could achieve close to 7% growth in the FY‑24 period, exceeding the RBI’s 6.7% forecast. Minutes from the Aug. 3‑5 policy meeting suggest the central bank may consider raising rates later this year.
Risks and Final Thoughts While the PMI data paints a resilient picture, risks linger. Renewed Middle East tensions and high oil prices threaten inflation, especially as India imports about 90% of its crude. The flash figures are preliminary; final PMI releases next month may adjust these numbers. Overall, the economy remains on a cautious growth path amid external uncertainties.
