India’s June services activity shrinks at fastest rate in 11-months

Input prices rose again last month on high raw material and transportation costs, indicating inflation could stay above the Reserve Bank of India`s comfort range of 2-6% in coming months.

Activity in India`s dominant services sector contracted sharply in June as tighter restrictions to contain a resurgence of coronavirus cases hammered demand and forced firms to shed jobs at a rapid clip, a private survey showed on Monday. Asia`s third-largest economy, which has already recorded more than 400,000 COVID-19 deaths, is still reporting over 40,000 coronavirus cases per day, taking the total number of infections to over 30.5 million. IHS Markit`s Services Purchasing Managers` Index plunged to 41.2 last month from an already depressed 46.4 in May. That was its lowest reading since July 2020 and well below the 50-level separating growth from contraction.