India’s private sector growth dropped to its slowest pace in over three years in March, as growing costs associated with the Middle East crisis affected domestic demand, according to a poll issued Tuesday.
The HSBC Flash India Composite PMI, calculated by S&P Global, dropped to 56.5 from 58.9 in February, falling short of market forecasts. While the reading stays over 50, suggesting growth, it represents a significant loss of momentum.
Manufacturing activity was severely hurt, with the PMI falling to a 4.5-year low of 53.8 due to market uncertainties and weak consumer demand. The services sector also experienced a slowdown, with the PMI dropping to 57.2.
Input costs increased at their fastest rate since June 2022, owing to rising oil, energy, and raw material prices. As a significant energy importer, India is still exposed to oil price shocks, particularly problems near the Strait of Hormuz.
Despite domestic difficulties, international demand provided some relief, with export orders hitting a record high. Business confidence strengthened, resulting in increased employment activity.
The results show mounting dangers to India’s economic prospects, as geopolitical tensions continue to have an influence on prices and growth.
Source – The Economic Times
