Today’s Business Survey (Nov. 1) shows that industrial production in Asia fell in October due to concerns about the global economic recession and the continued enforcement of Covid-19 policies.
Analysts said that a further increase in interest rates by the Federal Reserve (Fed) is likely to put pressure on most central banks in Asia to tighten national monetary policy in order to stem serious capital outflows. Even if this slows down already weak economic growth.
Manufacturing in South Korea, Taiwan and Malaysia contracted in October, while manufacturing in Japan grew at its slowest pace in 21 months, underscoring the impact of slowing demand from China, and import costs are high across the board.
The Caixin/S&P China Manufacturing Purchasing Managers Index (PMI) Global was 49.2 in October, although up from 48.1 in September, the index remains below 50, indicating a decline in Chinese manufacturing activity.
China’s private sector manufacturing PMI is in line with the official PMI released on Monday (Oct. 31), which showed that China’s manufacturing activity unexpectedly declined in October.
Incidentally, the International Monetary Fund (IMF) recently lowered its forecast for the Asian economies. The reason for this is the tightening of global monetary policy and rising inflation as a result of the war in Ukraine. And the sharp slowdown in the Chinese economy has undermined the prospects for the recovery of the Asian economy.