China GDP growth beats forecasts, but official data revealed a contraction in consumer activity as lockdown measures weighed on the country’s economic outlook.
According to the National Bureau of Statistics China’s GDP beat the expectations after growing 4.8% on 2022 first quarter, topping the 4.4% growth expected a year ago. Exports rose by a more-than-expected 14.7% in March, but imports fell by 0.1% from a year ago.
Beginning in March, China has struggled to contain its worst covid outbreak since the pandemic started in 2020. Then, widespread lockdowns choked growth resulting in a 6.8% contraction, today the full impact of the ongoing surge in infections is yet to be seen, since widespread lockdowns are threatening to hold back growth in the months ahead.
A surging global economic super power, China is also struggling with uncertainty over the Ukraine war and the spike in commodities and energy prices.
Now, many economists are questioning the 5.5% GDP target for 2022. The International Monetary Fund forecasts now China’s 2022 economic growth at 4.9%, well down from 8.1% expected last year.
China’s financial hub Shanghai is the epicenter of the current Covid outbreak and the mega city is not alone. Analysts estimate that there are over 45 cities in full or partial lockdowns, affecting about 40% of the economy.