Chinese economy: China’s economic growth expected to slow due to coronavirus and flooding
China’s economy is still in a “recovery trend” after last year’s pandemic-induced slowdown, but is expected to weaken after a relatively strong first half, said Fu Linghui, spokesperson for the National Office. statistics.
“The main economic growth trend this year will be ‘weak after peak’,” Fu said at a press conference.
Fu gave no growth forecasts. Private sector forecasters say the world’s second-largest economy should easily reach 8% from last year’s depressed level.
Retail sales growth in July slowed to 8.5% year on year, below consensus forecast of 10.9% and down from 12.1% the previous month. Factory output rose 6.4%, below forecast of 7.9%.
“The growth momentum has weakened sharply,” Louis Kuijs of Oxford Economics said in a report.
The economy was disrupted by unusually severe summer flooding that hit central China in July, killing more than 300 people in Henan province. Further flooding hit southern Hubei province this month, killing at least 21 people.
Meanwhile, authorities have reimposed some travel and business controls to tackle the most contagious coronavirus outbreaks
variant which started at the end of July. Some air flights and rail services have been canceled, most access to a city of 1.5 million people have been cut and mass screening tests have been ordered in some areas.
“Given China’s ‘zero tolerance’ approach to Covid, future outbreaks will continue to pose a significant risk to the outlook,” Kuijs said.
The government earlier reported that economic growth slowed to a still strong 7.9% year on year earlier in the three months ending June, down from 18.3% in the previous quarter. These numbers were magnified from early 2020, when the economy was shut down to fight the virus.
Second-quarter output compared to January-March, the way other major economies are measured, was 1.3%, up from 0.6% in the previous quarter compared to the end of 2020 .
Fu, the head of statistics, expressed confidence that the long-term outlook was still healthy.
“The economy will always maintain a stable recovery,” Fu said. “The quality of development will continue to improve.”