Brexit is sure to damage the economic growth of both the EU and U.K. America’s GDP growth has been lackluster. Japan’s decades long financial trouble has not ended, and will not soon. Add to that the bad new from the Caixin China Purchasing Managers’ Index which shows the world’s second largest economy by GDP posted only 48.6 in June. Any number below 50 signals contraction.
The reading of 48.6 for June is the lowest since January, and marks the 16th consecutive month of contraction due to sluggish demand at home and abroad
Commenting, Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group, a subsidiary of Caixin Insight Group, said
“Overall, economic conditions in the second quarter were considerably weaker than in the first quarter, which means there has been no easing of the downward pressure on growth. Against the backdrop of a turbulent external environment, and in order to avert a sharp economic decline, the government must strengthen its proactive fiscal policy while continuing to follow prudent monetary policy.”
The Caixin China Manufacturing PMI is compiled by Markit, a global financial information services provider, based on data from monthly replies to questionnaires sent to purchasing executives in over 500 manufacturing companies. It tends to focus more on private sector companies, unlike a similar government-compiled PMI that focuses more on the state-run sector.