Services growth sinks to one-year low in May, dented by elections: PMI

Optimism about the next 12-months improved slightly and firms increased the pace of hiring to the fastest in three months

Activity in India’s dominant services sector grew at its slowest pace in a year in May, hurt by weak domestic demand, a private survey showed on Wednesday, while a sharp easing in price pressures virtually cemented the case for another rate cut this week.

The Nikkei/IHS Markit Services Purchasing Managers’ Index fell to 50.2 in May, its lowest since May 2018 and only a touch above the 50-mark that separates contraction from growth.

That will make disappointing reading for policymakers, after data last week showed India’s economic growth slipping to its weakest in more than four years in January-March.

“India’s dominant service economy