Emerging markets see 'gradual but modest recovery'
Emerging markets economies are recovering at a gradual pace, with China leading the way, a new indicator gauging growth in 16 countries shows
The HSBC Emerging Markets Index (EMI), a monthly weighted composite indicator derived from national HSBC Purchasing Managers' Index reports in 16 countries, was nearly flat at 52.6 in March from February's 52.4.
But the average EMI reading for the first three months of 2013 was 52.9, higher than in both the third and fourth quarters of last year.
Manufacturing output recorded a mild acceleration in growth, led by China, South Korea and Taiwan. The service sector expansion eased to a seven-month low.
New orders picked up slightly in manufacturing and eased in the service sector.
Employment rose, but at a slightly weaker rate than the long-run survey average.
The survey showed that input price inflation in emerging markets slowed from February's 10-month high to the weakest since August 2012 and prices charged for goods and services rose at the slowest rate for six months.
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"A gradual but modest recovery is under way in emerging markets," Pablo Goldberg, global head of emerging markets research at HSBC, said in a statement. "Inflation pressures stay subdued. Regional central banks to maintain an accommodative stance."
Frederic Neumann, co-head of Asian economic research, said that the lift in the index partially reflected stronger activity in China, where output was previously dampened by the Lunar New Year holiday.
Economies such as Korea, Taiwan, Indonesia and Vietnam, which are sensitive to changes in China, also showed gains last month, he noted.
"However, further afield the lift from rebounding output in China has not had as powerful an effect, notably in Brazil, India and Russia," Neumann added. "This most likely reflects harsher global headwinds."
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