The PMI (Purchase Manager Index) is a classic measure of whether the particular segment is seeing an expansion or a contraction. Markit Economics calculates this PMI for manufacturing and services separately for all major countries on a monthly basis and announces it in the first week of the next month. For the month of December 2016, India has seen a distinct contraction in manufacturing and services PMI. The chart below captures the trend of PMI manufacturing and services for the last 21 months…
Key takeaways from the PMI Numbers…
The PMI numbers have surely raised some concerns for economists and policy makers in India. The next 2 months could be critical. If a rapid recovery does not happen, the actual impact on GDP could be much steeper than what was originally envisaged.
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