Japan’s unemployment falls to 2.5%, China’s manufacturing PMI drops to 49.3, and India’s External debt ratio declines to 18.8%

In recent global economic developments, data from Japan, China, and India reveal shifting dynamics in employment, manufacturing, and debt ratios, providing critical insights into the financial outlook for these regions.

Japan’s unemployment rate dropped to 2.5% in August 2024, down from July’s 11-month peak of 2.7%, beating market expectations of 2.6%. This positive trend highlights a recovering labor market, driven by stable industrial output and demand in key sectors. The decline suggests that Japan is gradually overcoming the employment challenges posed by earlier economic disruptions, with a steady recovery trajectory in the labor market.

In China, the Caixin China General Manufacturing PMI fell to 49.3 in September, down from 50.4 in August. This figure missed the market forecast of 50.5, signaling a contraction in the manufacturing sector, as the PMI slipped below the 50-mark, which separates growth from contraction. The drop indicates the lowest level since July 2023, pointing to weakened demand and production in China’s manufacturing sector, which could impact global supply chains and economic growth.

In Japan, the Bank of Japan’s index for big manufacturers’ sentiment held steady at 13 in Q3 of 2024, matching market forecasts. This marks the second consecutive period of stability in sentiment, indicating cautious optimism among large manufacturers. While the sentiment index remains positive, manufacturers are likely weighing global uncertainties, including supply chain disruptions and fluctuating demand in key export markets.

India saw a slight improvement in its debt metrics, with external debt as a proportion of GDP declining to 18.8% by the end of June 2024, from 18.9% at the end of March 2024. This marginal decrease suggests improved debt management and a strong economic foundation, as the government continues to implement measures to control external borrowing and maintain financial stability.

India also reported a current account deficit of USD 9.7 billion for the quarter ending June 2024, amounting to 1.1% of GDP. This marks a widening of the deficit, driven by a rise in imports and relatively slower export growth. However, the manageable deficit level suggests that India remains on a stable economic footing, with room for improvement in balancing trade and financial flows.
India’s index of eight core industries recorded a 1.8% year-on-year decline in August 2024, following a 6.1% rise in July. The contraction reflects weaker performance in critical sectors such as coal, electricity, and steel, which may affect overall industrial output in the coming months. However, this decline could be temporary, with potential for recovery as infrastructure and industrial investments gain momentum.

These developments across Japan, China, and India highlight the varying economic trends in the Asia-Pacific region. While Japan shows promising signs of labor market recovery, China’s manufacturing sector faces challenges, and India continues to navigate its external debt and industrial performance.