India’s services activity grew at its fastest pace in three months in November on strong demand, boosting optimism to an eight-year high, according to a business survey that also showed prices have risen at the fastest pace since July 2017.

The S&P Global India Services Purchasing Managers’ Index rose to 56.4 in November from 55.1 in October, beating an estimate of 55.4 in a Reuters poll.

It stayed above the 50 mark for the 16th straight month, separating growth from contraction, the longest stretch of expansion since October 2016.

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“Indian service providers continued to benefit from strong domestic demand, with PMI data for the penultimate month of 2022 showing faster growth in new business and production,” noted Pollyanna De Lima, economics associate director at S&P Global.

“In addition, the expectation of increasing demand in the medium term promoted the creation of further jobs.”

Official data released last week showed that pent-up demand for services helped private consumption grow 9.7 percent annually last quarter, helping Asia’s third-biggest economy grow 6.3 percent over the period percent grew.

However, growth is widely expected to slow in the coming quarters as high interest rates hamper economic activity.

The PMI showed foreign demand rising for the first time since the pandemic began, an encouraging sign amid slowing global growth that has already begun to hurt exports, which fell 17 percent in October a year ago.

Strong demand pushed business confidence to its highest level since January 2015.

However, the rise in input prices forced companies to raise prices more than they had in about five and a half years.

That could put further pressure on headline inflation, which fell to a three-month low of 6.77 percent in October but remained above the Reserve Bank of India’s tolerance level.

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“Signs of stubborn inflation could lead to further interest rate hikes if global economic challenges could weigh on India’s growth,” De Lima added.

The RBI, which has already hiked interest rates by 190 basis points since May, will raise the repo rate by a smaller 35 basis points to 6.25 percent on Wednesday and a peak of 6.50 percent by the end of March, according to a Reuters Opinion poll.

A stronger expansion in services activity combined with better-than-expected manufacturing growth pushed the composite index up to a three-month high of 56.7 in November from 55.5 in October.