Strong domestic demand pushes up factory growth

RBI may get encouraged by good output and reduce interest rates

GN Bureau | June 1, 2015


#manufacturing   #HSBC   #manufacturing  

Riding on domestic demand, Indian manufacturing activity rose at its fastest pace in four months in the month of May, a business survey found on Monday.

The figures are expected to give another boost to a possible central bank interest rate cut. The Reserve Bank of India is holding a policy review on Tuesday.

The HSBC Manufacturing Purchasing Managers' Index, compiled by Markit, rose to 52.6 in May from April's 51.3, smashing the 51.2.

Any reading above 50 indicates expansion and May was the nineteenth straight month of industry growth. An index monitoring new business, which highlights underlying demand, jumped to 54.3 in May from 51.9.

Firms reduced staffing levels for the third month out of the last four in May. What may also cause the RBI some concern is the rate of price rises - although April inflation was well within the upper-end of the central bank's target.

The RBI is widely expected to cut its key interest rate by 25 basis points to 7.25%, when it meets on Tuesday.

Indian GDP data, which released on Friday, showed the economy grew 7.3% in the fiscal year 2014/15, and expanded faster than China for a second consecutive quarter.

While that seems healthy there are nagging doubts over the reliability of the data. Many economists believe that changes made earlier this year to the way government statisticians calculate GDP may have distorted the macroeconomic view.

Comments

 

Other News

Vice presidential election on August 5

The election of the vice president will take place on August 5, said the Election Commission of India on Thursday.   The term of vice president Hamid Ansari ends on August 11.   "The date of polling will be August 5. Counting will be done on

Why #NotInMyName can’t be in my name

 It was big. It was energetic. It was emotional and soul awakening. It was the need of the hour. Its message was loud and clear. But #NotInMyName cannot be in my name. The #NotInMyName protest is a demonstration that was scheduled in Delhi and in some 21 cities across the country on June 28

Why Gorkhaland is an idea whose time has come

Darjeeling and the neighbouring areas are burning once again after the fire of the demand for Gorkhaland state was ignited by the West Bengal government’s provocative action in trying to impose Bengali language on the Gorkhali speaking majority in the hill districts in the north of the state. Three p

India stares down the dragon

India is increasingly turning to defence diplomacy to gain strategic depth in its neighbourhood and beyond, a move that is expected to checkmate China’s muscular domination. Defence as a tool of diplomacy is helping India to win over friendly countries who are currently witnessing a lot of

Recalling a time when BJP opposed GST

The Bharatiya Janata Party is today going to town over the Goods and Services Tax (GST). But, there was a time in the recent past when the party opposed it tooth and nail, with the Gujarat government, then led by Narendra Modi, describing it as “retrograde in nature and completely against the tenet

No water in a reservoir that supplies Chennai

There is not even a drop of water in Cholavaram reservoir, says an officer from Chennai metropolitan water supply and sewerage board. The Cholavaram reservoir, one of the main water sources to Chennai, currently has zero million cubic feet (mcft) of water, according to data provided by Chennai me





Video

गाय के नाम पर जान लेना बर्दाश्त नहीं - मोदी

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter