Covid era down; Chinese economy expected to bounce backtext_fields
Beijing: When China is going to release its first quarterly GDP report on Tuesday, it is expected that it will announce an economic rebound. This will be the first GDP release after withdrawing stringent Covid-19 restrictions that affected trade, Agence France-Presse reported.
China had imposed strict quarantines, mass testing, travel restrictions etc., as part of its ‘Zero Covid Policy” in a bid to contain a severe Covid-19 spread last year, and it had affected normal economic activity gravely. After stringent protests and demonstrations, the administration withdrew it abruptly in December.
Analysts polled by AFP expect an average of 38 per cent year-on-year growth from January through March.
However, there are other crises China is facing which could influence or deter its economy’s return to normalcy. The challenges include a debt-laden property sector to flag consumer confidence, global inflation and the threat of recession elsewhere in the world.
A Chinese expert said that their economy’s recovery is real but is at an early stage, and any rebound will be gradual. This is primarily because of consumers’ weak confidence, which makes companies reluctant to hire more staff, the expert opined.
In the last year, the Chinese economy grew only by three per cent, which is the least in decades. When it lodged a 4.8 per cent growth in the first quarter of 2022, it was just 2.9 per cent in the final three months of that year.
Real estate was an important driver for China’s recovery from the first wave of the pandemic in 2020. Beijing had managed to stop the spread of the virus then.
Now, there is a weak demand pulling down the sector here after prices for homes fell, and debts crippled the sector. Developers are struggling to survive in the reeling sector.
However, in recent weeks, the situation has gotten better after official support aided prices to stabilize in March, National Bureau of Statistics figures, released on Saturday, suggested.