(Aug 21): India’s economic activity remained subdued in August as a slowdown in manufacturing was offset by slight growth in the services sector, a flash survey by HSBC Holdings plc showed Friday.

The manufacturing purchasing managers’ index fell to 52.9 this month from 53.5 in July, while the services purchasing managers’ index stood at 54.5 from 53.3 in the same period. That resulted in the composite index rising marginally to 54.6 in August compared with 54.3 in July, which last month was over four-year low. 

The indices, reflecting business confidence in the economy, are based on preliminary surveys. The data may be revised when final PMI figures are released next month. A reading above 50 indicates expansion in economic activity, while a print below that indicates contraction.

Output and new orders rose, but at a slower pace, said Pranjul Bhandari, chief India economist at HSBC in a statement. “Cost pressures eased, but firms raised selling prices faster, pointing to stronger pass-through.”

India’s economy has proved to be more resilient than initially expected, with fears of a sharp inflation spike and economic slowdown failing to materialise so far. Still, risks remain, particularly from renewed tensions in the Middle East and high oil prices, given India imports around 90% of its crude oil.

The nation could clock growth of close to 7% in the financial year through March, exceeding the Reserve Bank of India’s 6.7% forecast, Deputy Governor Poonam Gupta said at an event in Chennai on Thursday. Her comments underscore the improving outlook, even as minutes from the Aug 3-5 monetary policy meeting, released earlier this week, showed policymakers — including Gupta — weighing the possibility of raising interest rates later this year.

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