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Quick Edit | Demand dilemmas

Quick Edit | Demand dilemmas
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First Published: Tue, Jun 01 2010. 11 43 PM IST
Updated: Tue, Jun 01 2010. 11 43 PM IST
A new spectre haunts the global economy. Markets worldwide have been jittery about two things for the past month: Europe’s sovereign debt and a Chinese bubble. But the two could be weighing on the real economy to create a new one.
Both Europe and China are generating uncertainty. And China’s regulators have not just tightened money, but also clamped down on the housing market. All of this has snowballed into a global commodities bust with several commodities seeing their worst fall since Lehman collapsed, with producers pulling back and waiting. That’s why the new concern on the block is manufacturing: Chinese data for May, released on Tuesday, looks ugly.
If this concern is well founded, we’re looking at a slump in demand—to be felt beyond commodities.
India may be better off, thanks to domestic demand: recent data, especially manufacturing, suggest so. But to what extent, and for how long?
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First Published: Tue, Jun 01 2010. 11 43 PM IST
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