China’s economic growth slumps sharply after Covid lockdowns
China’s economic growth has slowed sharply in the second quarter of the year, official data showed on Friday, highlighting the colossal toll from widespread Covid lockdowns and casting doubt over whether its pre-ordained growth target can be met.
Output contracted by 2.6% between April and June compared with the previous quarter, the statistics bureau said, prompting many economists to revise their predictions for the world’s second biggest economy.
On an annual basis the economy grew 0.4% in the second quarter, the worst since the pandemic-hit first months of 2020, but even that was worse than the consensus forecast by economists of 1%.
The consultancy Capital Economics said the real figure was probably “even weaker than meets the eye” and suggested that the Chinese government – accustomed to trumpeting growth well above that achieved by western countries – could be trying to disguise the economy’s sluggishness.
“Even with some massaging of the figures, it’s hard to see how the government’s target of ‘around 5.5%’ growth this year can be attained. That would take a huge acceleration in the second half of this year, which is unlikely,” said Julian Evans-Pritchard, China economist, in a note on Friday.
While noting some strong signs of recovery in retail sales for example, Evans-Pritchard said growth was “likely to remain relatively weak over the coming quarters”.
“We expect the official GDP figures to eke out growth of 3%-4% this year but think the reality on the ground will be closer to zero growth across the year as a whole,” he said.
The signs were mounting that the economy was slowing. This week’s figures showed that imports for the second quarter grew by just 0.1%, called “staggeringly” low by one economist considering
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