Monitoring Desk
ISLAMABAD/TOKYO: Asia’s factory activity contracted in January 2023 as the boost from China’s Covid-19 reopening is yet to offset headwinds from slowing United States and European growth, surveys showed on Wednesday, underscoring a fragility of the region’s economic recovery.
A private sector survey showed that China’s factory activity shrank more slowly in January after Beijing lifted strict Covid-19 curbs late the previous year.
The survey showed that softening input-price pressures offered initial positive signs for Asia, with a pace of contraction in output slowing in South Korea and Japan.
Analysts said there needed to be more certainty about whether Asia can weather the hit from slowing international demand and stubbornly high inflation.
Asia’s downturn
“The worst of Asia’s downturn behind, but weaknesses cloud the outlook in main export destinations like Europe and the US,” said Toru Nishihama, in Tokyo, chief economist at Dai-ichi Life Research Institute.
“With the recovery from covid-19 underway, Asian economies need a new growth engine. There isn’t one so far.”
China’s Caixin/S&P international manufacturing purchasing the managers’ index (PMI) nudged up to 49.2 January 2023 from 49.0 in the last months, staying below the 50 mark, separating growth from contraction for a sixth straight month.
