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Economy still perilled by policy indecisiveness

By IndianMandarins- 04 Jun 2016
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economy-still-perilled-by-policy-indecisiveness  Here is another warning for NDA-2 leaders who have been making too much of a freak 7.9 percent growth in the last quarter of FY16. In tune with the warning sounded out by Indianmandarins this week on the state of the economy, services sector activity in the country dipped for the second straight month in May and was the weakest since November 2015. The Nikkei Services Business Activity Index fell to 51 in May from 53.7 in April. "New business inflows expanded at the slowest rate since July 2015," said a release on Friday. A reading above 50 represents expansion while one below this level means contraction Also, the Nikkei India Composite PMI Output Index, which maps both manufacturing and services sectors, fell to a six-month low of 50.9 in May from 52.8 in April. "Latest PMI numbers raise doubts about the effectiveness of economic and monetary policies," Pollyanna De Lima, an economist at Markit, which compiles the survey, said. Manufacturing growth eased in May, which combined with the slowdown in services resulted in a weaker increase in private sector output, the survey said. Lima further said that "Ongoing weakness in manufacturing and services was evident in May, with output growth losing momentum for a second straight month. Overall expansion across the two sectors was the lowest since last November, as was the case for new orders.''

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