China, India PMIs show inflation pressures - HellenicNews

Costs for Chinese and Indian factories jumped in February, pointing to a need for more measures to prevent inflation from undermining the world's two fastest-growing economies, surveys showed on Tuesday.

The February purchasing managers' indexes provide the latest evidence of the growing inflationary pressure from the sharp rise in commodity prices that was already apparent in a round of global PMIs covering the month of January.
The head of the International Monetary Fund, Dominique Strauss-Kahn, warned on Monday that global economic growth could suffer if a rise in oil prices that has taken Brent crude above $100 a barrel was sustained for a long period.
Two China PMIs showed that manufacturing growth slipped to its slowest pace in at least six months in February, a sign that the government's campaign to tame inflation was biting.
But gauges of factory input prices hit three-month highs in both China's official PMI and a private-sector PMI sponsored by HSBC.
"It certainly supports our call for more interest-rate and reserve-ratio hikes, albeit less aggressive, in the near term," Mingchun Sun, economist at Daiwa in Hong Kong, said in a research note.
India's manufacturing sector expanded at its fastest clip in three months in February as new orders poured in, a PMI showed.
But at the same time, factory input prices rose at the fastest pace since the PMI records began in 2005. It also marked the index's eighth consecutive monthly rise.
India suffers from the highest inflation of any major Asian economy even after seven rate rises in a year. Although monetary policy can do little to control domestic inflation fueled by increases in global commodity prices, the risk is that the cost pressure will spread in the economy.
"Manufacturers are facing ever steeper increases in input costs, reflecting the tightness of labor markets and rising material costs, which will continue to add upward pressure on output prices." said Leif Eskesen, chief economist for India and ASEAN at HSBC, which sponsors the index.
In other PMIs, Russian manufacturing expanded in February at the fastest pace in three years as new orders growth quickened, prompting companies to step up hiring.
An Irish PMI had similar themes as the index showed the pace of factory activity at an 11-year high and Turkey's PMI hit a record high.
A February PMI covering the euro zone is due to be released around 0900 GMT and is expected to show factory expansion was steady from January.
However, growth in the U.S. manufacturing sector may have quickened modestly in February, data is expected to show at 1500 GMT. more ...