The country’s service sector has recorded commendable performance right before the festive season. The S&P Global India Services Purchasing Managers Index (PMI) increased to 57.2 in the month of August, which is more than expected.
Observing the activities of the service sector, different rating agencies had estimated it to remain at 55, it was 55.5 in July and interestingly, it is the continuous thirteenth month when it is above 50. It is being said that the better performance of the service sector in August was because of the beginning of new businesses. As a result of which, new jobs in this sector increased.
As per the S&P survey, the highest job increase in 14 years has taken place in August, in which the largest contribution is of the service sector. This development is also significant because the service sector contributes more than 50% to the country’s GDP. This sector was the hardest hit during the time of the COVID-19 pandemic.
Polinna D Lima, Associate Director, S&P Global Market Intelligence, said that the positive effects of the COVID-19 restrictions coming to an end can now be seen. The service sector has witnessed tremendous increase in the middle of the second trimester.
While the economy hiked at the greatest speed in between April and June, some economists have predicted that the pace can slow down in the coming trimesters and the effects of constantly increasing interests, inflation and global recession can be seen on us as well.