Global economic outlook remains gloomy amid the European debt crisis, even though the global manufacturing industry bounced back last month, a Citibank economist said yesterday.
The flash readings for last month’s Purchasing Managers Indices (PMIs), indicators of the economic health of the manufacturing sector, showed improvements in China, Japan, the US and Europe.
“We’ve only seen growth over one month and do not know [what] the following months [will bring],” Citibank Taiwan Ltd vice president and economist Cheng Cheng-mount (鄭貞茂) told reporters on the sidelines of a seminar in Taipei.
Cheng said the indices may fluctuate over and below 50, like China’s PMI. A PMI of more than 50 represents expansion of the manufacturing sector compared with the previous month. A reading under 50 represents a contraction, while a reading of 50 indicates no change.
In addition, Cheng said the recent announcement by the US -Federal Reserve Bank that it would not raise interest rates until 2014 also “helped improve prospects.”
“I see the economy growing mildly, as there is no sign of a big improvement,” the economist said.
Although new orders, one of the sub-indices of the PMI, increased, inventory levels also rose, which “may not be beneficial to Taiwan,” he said.
“It still depends on ultimate demand,” he said, adding that the retail market in the US has weakened since Thanksgiving.
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