India’s economy expands at slowest pace in 2024, flash PMIs show

INDIA’S economic activity grew at the weakest pace in 2024 following a drop in both services and manufacturing sector, a flash survey by HSBC Holdings showed. 

The manufacturing purchasing managers’ index declined to 56.7 from 57.5 in August, while the services purchasing managers’ index dropped to 58.9 from 60.9 in the previous month. The composite PMI fell to 59.3 from 60.7 the previous month. 

The indexes are calculated based on preliminary surveys and show business confidence in the economy. A reading above 50 indicates expansion compared with the previous month, while a print below that indicates contraction in economic activity. 

“Rates of increase in output charges slowed in both sectors, with manufacturers experiencing a larger slowdown, implying a bigger reduction in their margins,”said Pranjul Bhandari, chief India economist at HSBC, in the statement. 

The slip in the economic activity comes even as India’s central bank projects that the country will likely stay as the fastest growing major economy in the world, expanding over 7 per cent in the year through March 2025. Strong growth has helped the Reserve Bank of India to keep its interest rate unchanged for over 18 months, though most economists expect a cut by December. 

The expansion in total business activity generally reflected increasing new orders. Meanwhile, the rise in employment in the service sector was the steepest since August 2022, as companies responded to robust growth in new orders, HSBC said. BLOOMBERG