Is the world economy moving towards a new winter of discontent?
The latest data about new orders for factory output shows that manufacturing activity is weakening across the world. The fresh readings of the HSBC-Markit Economics Purchasing Managers’ Index, or PMI, (the actual data is available on this page) suggests that the world could be stumbling towards another spot of trouble, if not an outright recession.
Also, earlier this week, the Organisation for Economic Co-operation and Development said global merchandise trade in the second quarter of this year grew at a slower rate than in the first quarter. The PMI for export orders predicts a further slowdown.
Gloomy economic data, financial market turmoil and policy paralysis in the West do not inspire confidence. A lot now depends on Asia, but inflation control is the more pressing task in most economies here.