BENGALURU, March 3 (Reuters) – Activity in India’s dominant providers sector expanded on the quickest tempo in 12 years in February on sturdy demand as value pressures eased additional, a non-public enterprise survey confirmed on Friday.

The sturdy report may gasoline hopes for Asia’s third-largest economic system, whose growth slowed to an annual 4.4% in October-December from 6.3% in July-September as pent-up demand eased and weak spot within the manufacturing business continued.

The S&P Global India Services Purchasing Managers’ Index (INPMIS=ECI) rose from 57.2 in January to 59.4 in February, its highest since February 2011 and significantly above all forecasts in a Reuters ballot which had predicted a fall to 56.2.

It was above the 50-mark separating development from contraction for a nineteenth straight month, its longest stretch of growth since June 2013.

“The service sector more than regained the growth momentum lost in January…as demand resilience and competitive pricing policies underpinned the joint-best upturn in sales over the same period,” famous Pollyanna De Lima, economics affiliate director at S&P Global.

Although new enterprise surged at its quickest fee in eight months, corporations solely elevated hiring marginally and enterprise confidence was the bottom in seven months.

“It seems that hiring growth was also dampened by a lack of confidence in the business environment. The degree of optimism recorded in February was…below the historical trend as some companies doubted demand would remain this resilient,” De Lima added.

“Others displayed concerns surrounding fierce competition for new work.”

However, enter prices rose at their slowest tempo since September 2020, enabling corporations to lift costs charged on the weakest fee in a yr.

If that pattern continues, total inflation, which rose to six.52% in January, may ease over the approaching months and may present some respiratory house for the Reserve Bank of India.

The RBI is anticipated to lift its repo fee to peak at 6.75% in April from 6.50% presently, based on a Reuters poll final week.

Strong development in providers exercise boosted the composite index to 59.0 in February from January’s 57.5, regardless of manufacturing growth slowing to a four-month low.

Reporting by Indradip Ghosh; Editing by Kim Coghill

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