Indian factory output surged to a 17-month peak in July, according to a key business survey. Car sales accelerated briskly, after falling for two straight years.
The Purchasing Managers’ Index (PMI) survey jumped a full 1.5 points to 53.0 last month -- its best level since February 2013. A reading of over 50 points suggests expansion while under 50 indicates contraction.
Separate data Friday showing vehicle sales shifting into the fast lane also indicated greater economic buoyancy. Leading carmaker Maruti Suzuki’s unit sales jumped 22 percent in July from the same year-ago month while Honda’s sales leapt 40 percent. Input prices accelerated at their fastest, suggesting high inflation could rise further. Middle East tensions could raise crude oil costs in an economy dependent on imported fuel.
Most economists expect no cut in rates until the first quarter of the next financial year with consumer price inflation riding at 7.31 percent.
Published in The Express Tribune, August 2nd, 2014.
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