New Delhi:The second wave of Covid-19 infections that was triggered by a new variant of SarS-CoV-2 virus known as Delta variant has significantly damaged economic activity across several countries in Asia as the authorities imposed national and local lockdowns to curb the rising cases in April-May this year. The second Covid wave was particularly hard on Asia’s third-largest economy India as it faced an unprecedented surge that touched around 4,00,000 daily new cases in early May and over 4,000 daily deaths before subsiding to around 48,000-50,000 daily new cases and around 1,000 deaths in the last week.
As a result, economic activity was impacted as several provinces in India imposed restrictions on movement of goods and people. In June, India’s manufacturing activity as measured by Purchasing Managers’ Index (PMI) declined from 50.8 in May to 48.1 in June this year, the first decline in 11 months. However, India is not the only country that has experienced decline in economic activity due to new strains of Coronavirus. Most of the major economies in Asia faced the brunt of virus-induced lockdowns.
According to the data compiled by the Oxford Economics, June PMIs showed a broad-based deceleration in activity in Asia as new cases of coronavirus infections weighed on domestic demand and external orders rising at a slower pace. “Barring South Korea and the Philippines, the PMIs of all major Asian economies fell in June. In addition to domestic demand, a slower pace of rise in external orders weighed on output in most economies,” said economists in a report published by Oxford Economics. While aggregate Asia PMI fell from 53.9 in May to 52.1 in June, the decline was broad-based with the northeast Asia PMI dropping from 55.2 to 53.8 as the PMI for ASEAN countries declined from 51.8 to 49.
“PMIs continue to reflect weak domestic conditions in the coronavirus-hit economies. But they also highlight that global shipping delays, semiconductor shortages, and supply chain disruptions are impinging on external orders,” Oxford Economics said in a statement sent to ETV Bharat. It said the latest data showed slowing export momentum in many Asian economies, including China and Singapore that dampens the near-term outlook for manufacturing.
However, according to economists, things will improve in the third quarter onwards as lockdowns will be relaxed and global disruptions will recede.
Malaysia, Vietnam suffer severe economic contraction