China’s 2022 economic growth one of the worst on record, post-pandemic policy faces test


BEIJING – China’s economic growth in 2022 slumped to one of its worth in nearly half a century as the fourth quarter was hit hard by stringent Covid-19 curbs and a property market slump, raising pressure on policymakers to unveil more stimulus this year.

Gross domestic product (GDP) grew 2.9 per cent in October-December from a year earlier, data from the National Bureau of Statistics (NBS) showed on Tuesday, slower than the third-quarter’s 3.9 per cent pace. The rate still exceeded the second quarter’s 0.4 per cent expansion and market expectations of a 1.8 per cent gain.

On a quarterly basis, GDP stalled, coming in at zero growth in the fourth quarter, compared with growth of 3.9 per cent in July-September.

Beijing last month abruptly lifted its strict zero-Covid measures that had severely restrained economic activity in 2022, but the relaxation has also led to a sharp rise in infections that economists say might hamper near term growth.

For 2022, GDP expanded 3 per cent, badly missing the official target of “around 5.5 per cent” and braking sharply from 8.4 per cent growth in 2021. Excluding the 2.2 per cent expansion after the initial Covid hit in 2020, it’s the worst showing since 1976 – the final year of the decade-long Cultural Revolution that wrecked the economy.

Other indicators for December such as retail sales and factory output, also released along with GDP data, beat expectations but were still weak.

“Activity data in December surprised broadly to the upside, but remains weak, particularly across demand-side segments such as retail spending,” Louise Loo, senior economist at Oxford Economics, said in a note.

The ”data so far supports our long-held view that China’s reopening boost will be somewhat anaemic at the beginning, with consumer spending being a key laggard in the initial stages,” Loo said.

Others including Hao Zhou, chief economist at GTJAI, expect a steady improvement in consumption and investment, underpinned by China’s reopening and government-led infrastructure investment.

Growth is likely to rebound to 4.9 per cent in 2023, as Chinese leaders move to tackle some key drags on growth – the “zero-Covid” policy and a severe property sector downturn, according to a Reuters poll. Most economists expect growth to pick up from the second quarter.

Property recovery, population data worrisome

China’s property investment fell 10. per cent year-on-year in 2022, the first decline since records began in 1999, and property sales slumped the most since 1992, NBS data showed, suggesting that government support measures were having minimal impact so far.

Authorities have rolled out a flurry of support policies targeting homebuyers and property developers in recent weeks, to relieve a long-running liquidity squeeze that has hit developers and delayed the completion of many housing projects.



Source link

Denial of responsibility! galaxyconcerns is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave A Reply

Your email address will not be published.