China’s economy cooled down in March as consumption, real estate, and exports were hurt by fresh COVID-19 restrictions and Russia’s invasion of Ukraine.
- The biggest short-term challenge for the Chinese government is the tough new Covid-19 rules at times of increased geopolitical risks that increased supply and commodity cost pressures.
- GDP grew by 4.8% in Q1 from a year earlier, beating analysts’ estimates for a 4.4 increase and rising from 4.0% in Q4.
- An unexpected strong start in the first two months of the year improved the key figures, with GDP increasing 1.3% in January-March on a quarterly basis compared with an expected 0.6% increase.
- Iris Pang, Greater China chief economist at ING, stated that further impacts from lockdowns are close, further noting uncertainty to services and factory operations has affected labor market.
Retail sales shrank the most on an annual basis since April 2020 on repeated COVID-19 restrictions across the country.
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