India’s Services Gauge Improves for Second Consecutive Month
(Bloomberg) -- India's main services index improved in June, as the nation started a phased exit from the world's largest lockdown to contain the coronavirus pandemic.
The Markit India Services PMI SA climbed to 33.7, gaining for a second month after April's record low of 5.4. A reading below 50 indicates contraction in activity.
Data published by IHS Markit on Wednesday showed activity in the manufacturing sector is also recovering, but still in the shrinkage zone. These better numbers pushed the composite index higher to 37.8.
The decline in activity means the services sector -- accounting for about 55% of India's gross domestic product -- failed to support the economy last quarter. That's prompted economists in a Bloomberg survey to forecast a 18.9% drop in GDP during the period, setting the economy on course for its first annual contraction in more than four decades.
“Simply put, the country is gripped in an unprecedented economic downturn,” said Joe Hayes, an economist at IHS Markit. It “is certainly going to spill over into the second half of this year unless the infection rate can be brought under control.”
Read: Delhi Overwhelmed by Covid-19 Cases After City Eases Lockdown
India was placed under a stringent nationwide lockdown since late March. The government allowed reopening of some shopping malls, restaurants and places of worship last month, while curbs remain on education institutions and certain modes of urban public transport.
©2020 Bloomberg L.P.
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