The manufacturing sector in India experienced strong growth in June, ranking as the year’s second-fastest expansion, but at a somewhat slower rate than in May. S&P Global’s latest Manufacturing Purchasing Managers’ Index (PMI) data showed a score of 57.8 in June, a small down from May’s reading of 58.7. This outcome fell a little short of the 58.0 poll’s prediction by Reuters.
Notably, the PMI has maintained a reading over the critical 50-point for two straight years, indicating sector expansion rather than decline. The manufacturing sector in India is benefiting from this steady expansion, which shows durability and strength in the face of increased inflationary pressures.
Input costs increased in June as a result of rising labour and some raw material prices, although the rate of inflation was only marginally higher than in May and was below the long-term average.
Businesses transferred costs onto customers, and the output prices index reached a 13-month high.The Reserve Bank of India’s (RBI) target range for inflation is between 2% and 6%, however the central bank has left the door open for potential future interest rate increases.
Since May 2022, the RBI has increased interest rates by 250 basis points, but it has kept the repo rate at 6.50% since April. It is anticipated to stay the same till the following year.