The HSBC's Purchasing Managers' Index that measures factory output showed significant growth for the month of December amid slowdowns in most developing economies
The HSBC Purchasing Manager's Index (PMI) came in at 54.5 for the month of December, as compared to 53.3 last month. A figure of above 50 signifies growth in output. December's growth is the highest in 2 years.
Prices for inputs were seen to have slumped as inflation fell and commodity prices cooled considerably.
"With the disinflationary trend gaining ground, the RBI is expected to find space for some rate cuts in 2015,” HSBC's Chief India Economist said according to reports.
The current numbers will give succour to the manufacturing environment as the coming year is hoped to be a year of rapid reforms. The markets and investors have been betting on an uptick in growth in the coming year.
The growth in factory orders was also ascribed to a larger number of foreign orders which is another welcome sign for the sector.
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