Economic activity in Asia is slowing despite growth in China
2023.02.01 03:27
Economic activity in Asia is slowing despite growth in China
By Kristina Sobol
Budrigannews.com – According to surveys released on Wednesday, factory activity in Asia decreased in January due to headwinds from sluggish U.S. and European growth and the boost from China’s COVID reopening. This highlights the fragility of the region’s economic recovery.
A private sector survey revealed that after Beijing lifted severe COVID restrictions late last year, factory activity in China decreased more slowly in January.
According to the surveys, a slowdown in output contraction in Japan and South Korea was one of the first positive signs that input-price pressures were easing.
However, according to some analysts, the ability of Asia to weather the impact of slowing global demand and persistently high inflation is uncertain.
Toru Nishihama, chief economist at Dai-ichi Life Research Institute in Tokyo, stated, “The worst of Asia’s downturn is behind, but the outlook is clouded by weaknesses in major export destinations like the United States and Europe.”
“As the COVID-19 recovery progresses, Asian economies require a new growth engine. So far, none exist.”
In January, China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI) increased to 49.2 from 49.0, remaining below the 50 threshold that distinguishes growth from contraction for the sixth consecutive month.
A better-than-expected official PMI survey that was released on Tuesday was compared to the data. The Caixin survey, on the other hand, focuses on small businesses and coastal areas, whereas the official PMI primarily targets large, state-owned Chinese businesses.
The au Jibun Bank PMI in Japan was 48.9 in January, unchanged from the previous month, as weak global demand hurt manufacturers.
However, the Japan PMI survey revealed that input and output price inflation were at their slowest pace in 16 months and that supplier delays were less common than ever before since February 2021.
In January, factory activity in South Korea decreased for the seventh month in a row. Although it was above the 50-point threshold, the reading was 48.5, up from 48.2 in December.
According to the survey, new orders in South Korea fell for the seventh month in a row in January, but the rate of decline was slightly slower than a month earlier.
S&P Global’s economist Usamah Bhatti stated, “The immediate outlook for the South Korean manufacturing sector appears challenging.” Market information.
“However, firms remained confident that global economic conditions would improve and stimulate demand,” the article continues.
According to PMI surveys, factory activity increased in Indonesia and the Philippines in January, but decreased in Malaysia and Taiwan.
The manufacturing sector in India started the year on a lower note, expanding in January at the sluggishest rate in three months as output and sales growth slowed.
The “surprisingly resilient” demand in the United States and Europe and the reopening of China’s economy following Beijing’s abandonment of its strict pandemic controls prompted the International Monetary Fund on Tuesday to slightly raise its outlook for global growth in 2023.
However, the International Monetary Fund (IMF) predicted that global growth would still slow to 2.9% in 2023 from 3.4% in 2022 and that the world could easily enter a recession.
