The Chinese economy contracted sharply in the second quarter of this year. The Gross Domestic Product (GDP) grew by 0.4 percent year-on-year during this period, while in the first quarter it grew by 4.8 percent. This is a worse reading than the analysts expected.
Economists surveyed by the Reuters Agency expected economic growth of 1.0 percent year on year. In the first half of 2022, GDP China rose by 2.5 percent, well below the government’s full-year growth target of around 5.5 percent.
China’s economy on the brake
Friday’s data strengthen fears of a global recession in connection with the challenges they pose for consumers and companies from around the world – war in Ukraine and supply chain disruptions.
The Reuters Agency recalled that China struggled with an increase in coronavirus infections in the second quarter. Full or partial lockdowns in March and April were introduced in major cities across the country, including Shanghai.
Although many of these restrictions have since been lifted and June’s data showed signs of improvement, analysts do not expect a quick economic recovery. The domestic real estate market remains in deep collapse.
China sticks to its tough “zero-COVID” policy, so the emergence of the highly infectious BA.5 coronavirus sub-variant has increased fears among businesses and consumers, Reuters reported.
According to analysts’ forecasts, economic growth in China will slow down to 4.0 percent in 2022.
Main photo source: EPA / ALEX PLAVEVSKI