Global Economy Plummets Warning... Simultaneous Contraction of Major Countries' Corporate Activities

[Asia Economy New York=Special Correspondent Joselgina] Indicators have emerged showing that corporate economic activities in major countries from the United States to Europe and Asia are simultaneously contracting sharply. Analysts attribute this to weakened consumption amid soaring inflation and interest rate hikes, coupled with the prolonged Ukraine war causing a rapid global economic downturn. If major economies cool down, the Korean economy, which is highly dependent on foreign trade, will inevitably suffer damage.

On the 23rd (local time), S&P Global released the preliminary August Composite Purchasing Managers' Index (PMI) for the U.S., which fell 2.7 points from the previous month (47.7) to 45.0. This marks the second consecutive month below the baseline of 50 and is the lowest level since May 2020, when COVID-19 was at its peak.

The PMI, a representative leading economic indicator, is derived from surveys of corporate purchasing managers on new orders, inventory, shipments, and employment. A reading below 50 indicates economic contraction, while above 50 indicates expansion. S&P Global's Chief Economist Cian Jones commented, "Demand has contracted due to interest rate hikes and high inflationary pressures."

The situation is worse in the Eurozone (19 countries using the euro), which is facing an energy crisis triggered by Russia. The Eurozone's August Composite PMI dropped to 49.2 from 49.9 in the previous month, marking the lowest level in 18 months. Christoph Weil, Senior Economist at Commerzbank, noted, "The decline in PMI in August following July means the possibility of a recession in the Eurozone in the second half of the year is significant." Japan's manufacturing PMI, released the day before, also hit its lowest point in 19 months.

Experts cite inflationary pressures due to energy supply instability, China's economic slowdown, and monetary tightening in major countries as factors hindering economic recovery. Bloomberg reported, "As corporate activities weaken in the U.S., Europe, and Asia, concerns are growing that soaring inflation and the Ukraine war will push the world into a recession," adding, "Economic data paints a bleak picture for the global economy, but most central banks are focusing on raising interest rates to lower inflation."

This content was produced with the assistance of AI translation services.