The Asian-Pacific market is witnessing newer COVID-19 infections which could disrupt global supply chain

The rising infection rates in the Asia-pacific region and fresh waves of the Covid-19 in various major manufacturing clusters in Asia could drastically impact the global supply chains, as a result of which, inflation rate is expected to witness a jump in the U.S.

South Korea, Japan, Vietnam and Taiwan are one of the most impacted countries amid these new waves of the virus. Many Asian manufacturing economies have been reporting newer COVID-19 outbreak in the past few weeks. These countries have been responsible for supplying essential products or raw materials that are to be shipped globally to many places as far as the U.S.

The countries have been witnessing an increase in infection however, the two biggest consumers of these economies the U.S. and China have been showcasing rising demand for such products amid low infection rates and ease of lockdown. One U.S. official stated that any issues pertaining to the global supply chain, including the shutdown of major factories across Asia could lead to a push in inflation across the U.S. And the final impact on the consumer prices could be higher than the impact on the consumer prices across China.

Official authorities of Vietnam have stated orders for temporary shutdown of four industrial parks in the northern region of Bac Giang. Three out of those four industrial parks host production facilities for Taiwan’s Foxconn which has been an assembler of Apple products.

Inflation rate is one of the most influential signals and it has been a major area of focus for the investors worried about a quicker rise in consumer prices and they could prompt the Federal Reserve to raise the interest rates earlier than what is expected. Additionally, the U.S. consumer price index soared to 4.2% in April which has been the sharpest increase in over a decade.