India’s July PMI (Purchasing Manager’s Index) dropped to 54.4, only marginally off the last month’s figure of 55.7. Anything above 50 is expansion so the growth story hasn’t really ebbed. The number is a composite of the services and manufacturing PMIs, the latter of which saw a fall to 52.9 from the 55 levels.
India has been growing for 39 consecutive months. Input inflation it seems has slowed to a 21 month low and it might just seem that money tightness has helped.
At this point, any good news will be taken positively by the market, after such a long period of bad-to-worse news flow. In any event I expect that tiny but non-crucial policy events will occur to encourage investors, until the next crisis. The fat lady hasn’t quite sung yet.
