The second quarter of this year saw a dramatic decline in China’s economy as a result of widespread coronavirus lockdowns that affected both consumers and enterprises.
The GDP decreased by 2.6 percent from the previous quarter in the three months ending in June.
Major Chinese cities, including the significant financial and industrial hub Shanghai, were either completely or partially placed under lockdown during this time.
The world’s second-largest economy grew by 0.4 percent annually in the April-June quarter, falling short of forecasts for a 1 percent increase.
“Second quarter GDP growth was the weakest outcome since the start of the epidemic,” said Tommy Wu, chief economist at Oxford Economics. “Lockdowns, particularly in Shanghai, adversely hampered activity at the start of the quarter.”
Following the removal of several of those restrictions, the country’s economic performance improved last month, according to official statistics.
“The numbers for June, however, were more encouraging because activity increased after the majority of the lockdowns were lifted. However, the real estate slowdown persisted in impeding growth “Added Mr. Wu.
In the meantime, Jeff Halley, senior market analyst for the Asia Pacific at trading platform Oanda, told that he also found some encouraging signs in today’s Chinese GDP data
Although the GDP was below expectations, the jobless rate dropped to 3.5 percent, and retail sales fared admirably, he noted.
Financial markets are probably going to focus on the retail statistics, which seem to indicate that the Chinese consumer is doing better than anticipated, said Mr. Halley.
However, given that the government is still adhering to its stringent zero-Covid policy in an effort to stop the coronavirus’s spread, many economists do not anticipate a speedy economic recovery for China.
The once-booming real estate sector of the nation is currently in a severe downturn, and recent months have seen a steep decline in the forecast for the world economy.
GDP is a gauge of economic size. Economists and central banks regularly monitor the economy’s expansion or contraction as one of the most crucial indicators of how well or poorly it is doing.
It aids companies in determining when to grow and hire more employees or invest less and reduce their workforces.
