BackChina economic growth slows less than forecast as recovery seen
Covid restrictions have resulted in China's 2nd slowest economic growth since the 1970s. However, better-than forecast fourth quarter and December data is a silver lining for the country
PremiumChina’s economy grew at the second slowest pace since the 1970s last year as Covid restrictions hammered activity, though better-than-forecast fourth quarter and December data add to optimism it may be primed for a recovery.
Gross domestic product in the world’s second-largest economy grew 3% in 2022, the National Bureau of Statistics said Tuesday, higher than the median estimate of 2.7% in a Bloomberg survey of economists.
The government had initially set a growth target of “around 5.5%," although Covid lockdowns and the sudden abandoning of restrictions in December put that GDP goal out of reach.
For the final quarter of 2022, the economy expanded 2.9% from a year earlier. Activity was weak in December, though not as bad as economists had feared.
- Industrial output rose 1.3% in December from a year ago
- Retail sales contracted 1.8%, compared with a prediction for a 9% decline
- Fixed-asset investment gained 5.1% last year, compared with a 5% increase projected by economists
- The urban jobless rate fell to 5.5% last month from 5.7% in November
China stuck to its Covid Zero policy for most of 2022, scarring output across the nation — from financial center Shanghai and technology hub Shenzhen to iPhone city Zhengzhou and car manufacturing base Jilin. The policy’s rapid dismantling in December caused more economic strain as infections surged, but activity has rebounded in recent weeks where cases have peaked, such as in the capital of Beijing.
Economists are now betting on a stronger recovery in coming months as consumer spending picks up and the housing slump eases. The median estimate in a Bloomberg survey of economists is for growth to accelerate to 4.8% this year, although some major banks like Morgan Stanley, Bank of America and Citigroup Inc. expect growth to be closer to 5.5% or higher.
Policy makers have signaled they’re prioritizing economic growth in 2023, with more fiscal and monetary stimulus on the cards. Key to their strategy is to boost consumption and investment in the country in order to drive growth. The government also recently took steps to ease its regulatory overhaul of the technology industry and reverse some of the restrictions on the real estate market.
China’s provinces are almost all targeting economic growth of 5% or more in 2023.
Officials are debating a national economic growth target of around 5%, Bloomberg News reported last month.
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This story has been published from a wire agency feed without modifications to the text.
