The survey was conducted before Russia’s invasion of Ukraine caused oil prices to spike.
Bengali language:
India’s factory activity growth accelerated in February as the threat from a third Covid-19 wave eased, while some price pressures eased, a separate survey showed. with business demand and expectations strengthening, a separate survey found.
However, the survey was conducted before Russia invaded Ukraine, causing oil prices to immediately skyrocket. India is the world’s third largest oil importer, so the crisis will add to inflationary pressure and hurt consumer sentiment.
The Manufacturing Purchasing Managers’ Index, compiled by IHS Markit from February 10 to 22, improved from 54.0 in February to 54.9 in February.
February’s index exceeded expectations of 54.3 in a Reuters poll and was well above the 50 mark, stopping growth from slowing for an eighth month.
Shreeya Patel, economist at IHS Markit, said: “The Indian manufacturing sector has weathered the storm of the Omicron variant for now, certainly aided by relatively high vaccination rates.
Output and new orders rose for the eighth consecutive month in February, led by the consumer goods sector on favorable demand and growing sales. Growth in international demand for Indian manufactured goods picked up slightly to a three-month high.
Business expectations over the next 12 months improved and the index rose to a 4-month high on hopes of a return to normalcy and expansion plans.
However, companies continued to shed jobs for the third month, although the rate of decline was the mildest and slowest in the series.
The input price index hit a six-month low in February but showed raw material costs rose for the 19th month as prices rose in metals, cotton, chemicals and rubber. Factories passed some of those higher costs on to customers.
Patel added, “However, there are still some key concerns that continue to threaten growth.
India’s economy grew 5.4% last quarter, slower than the previous two quarters and below 6.0% growth expected in a Reuters poll.
The spike in oil prices due to the Russia-Ukraine crisis is likely to have a major impact on inflation and the rupee as well as widening India’s current account deficit, slowing growth further.
The Reserve Bank of India is expected to raise interest rates next quarter to combat inflation, but if the crisis worsens, it could change those predictions.
