China’s economy is growing at the slowest rate since the first outbreak of the coronavirus outbreak in Wuhan, reflecting the impact of Covid’s zero policy that has resulted in major cities being closed.
The latest data from the National Bureau of Statistics (NBS) on Friday showed Gross Domestic Product (GDP) grew just 0.4% in the second quarter from the 1.0% expected by the market.
The figure also shows a significant decline from the growth recorded in the first quarter of 4.8%, making it the worst performance since the first quarter of 2020.
Meanwhile, on an annual basis, the economy contracted 2.6% against the expected contraction of 1.5% and declined from the previous expansion of 1.4%.
The fall was an impact on the Chinese government’s actions implementing the Covid zero policy to curb the spread of the wider epidemic, resulting in many factories, businesses and other economic activities being closed.
Analysts are of the view that the Chinese government’s goal for growth of around 5.5% this year may not be achievable, with GDP forecasts projected to grow just over 4%.
However, other data published by NBS showed consumption began to improve in June after sanctions measures at Shanghai’s financial and trade hub were eased.
Retail sales and industrial production were reported to increase with growth of 3.1% and 3.9% respectively last month.
