China’s economy grew at the slowest pace since the initial coronavirus outbreak in Wuhan, a reflection of the damage the nation’s zero-Covid approach has had on growth and the challenge Beijing faces in meeting its full-year target.
Gross domestic product increased 0.4 per cent from a year earlier, the worst performance since the first quarter of 2020, the National Bureau of Statistics said on Friday. Growth was far weaker than the 1.2 per cent gain in a Bloomberg survey of economists. On a quarterly basis, the economy contracted 2.6 per cent.
China’s economy is paying the price for Beijing’s attempt to stamp out Covid cases, a strategy that’s becoming evermore difficult as more infectious virus variants emerge. On top of that, the property market remains in a deep slump. Economists say the government’s ambitious growth goal of about 5.5 per cent is out of reach, with GDP forecast to expand slightly more than 4 per cent this year.
“The downward pressure on the economy has increased significantly since the second quarter,” with serious impact from unexpected factors, the NBS said on Friday. “The foundation for sustained economic recovery is not stable,” it said, weighed by rising stagflation risks in the world economy, tightening of monetary policies in major economies and the impact of domestic virus outbreaks.
Friday’s data showed consumption began improving in June after financial and trade hub Shanghai emerged from its crippling lockdown and restrictions in several other cities were eased.
Industrial output rose 3.9 per cent in June from a year earlier, up from May's increase of 0.7 per cent and compared with a median estimate of 4 per cent.
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