The HSBC Business Activity Index declined marginally to 59.3 in May from 59.7 in the previous month, mirroring a wider trend as Australia and Japan also slip
After posting contraction in 8 of the first 11-months of the year, the cumulative core sector output in the April-February period of FY21 fell to -8.3 percent.
However, inbound trade has continued to rise, pushed up by a surge in gold imports. As a result, the trade deficit also climbed up by more than 25 percent to $12.8 billion in February.
Despite GDP growing in the third quarter, the government now predicts the economy will shrink by a slightly larger margin of 8 percent in FY21, up from the earlier estimate of 7.7 percent. Economists say that this contrasting position in official statements springs from the fact that growth in key sectors are muted and COVID-19-related uncertainties remain strong.
According to experts, that result of policy decisions like timely unlocking of the economy, pitch for self-reliance, and relief measures for various sectors have yielded desired results quicker than expected
The wholesale price index (WPI), which tracks inflation at the wholesale inflation, came in at -4.54 percent year-on-year, improving somewhat from -4.95 percent in August, government data released today showed.
The flash HSBC Purchasing Managers' Index (PMI) came in at 49.8, after registering a 49.6 final reading in December, its first contraction in seven months. The 50-point mark separates growth from contraction.
"An adverse base effect, weak core sector performance and sector specific issues for sugar, gems and jewellery negated any pickup in consumption related to the kharif harvest and festive season as well as healthy exports growth," Aditi Nayar, senior economist at ICRA, said.
Chris Williamson, chief economist, Markit Economics explains to CNBC-TV18 that manufacturing data shows China rise on global recovery signs.
A contraction in Asian manufacturing spread in August as new export orders fell across the region from China to India, showing the euro zone debt crisis was having a deepening impact on the global economy.