8 months ago

China's economy loses momentum as Covid-19 cases surge

China's economy loses momentum(File Image)
China's economy loses momentum(File Image)


China, 24th July, 2023 : China's economy lost momentum in the second quarter of 2023, as the country's zero-Covid policy continued to weigh on businesses. Gross domestic product (GDP) grew at an annual rate of 0.4% in the second quarter, down from 4.8% in the first quarter. This was the slowest pace of growth in over two years.The slowdown was driven by a number of factors, including the ongoing Covid-19 outbreak, which has led to lockdowns in several major cities, including Shanghai. The lockdowns have disrupted supply chains and dampened consumer spending.

Looking ahead, the Chinese economy is expected to continue to slow in the third quarter. The International Monetary Fund has forecast that China's GDP will grow by 4.4% in 2023, down from 8.1% in 2022.The Chinese government has said that it will take measures to support economic growth, but it is unclear how effective these measures will be. The zero-Covid policy remains in place, and the government is reluctant to relax it, even as the economic cost of the policy mounts.

In addition, the Chinese government has been tightening monetary policy in an effort to control inflation. This has also weighed on economic growth.
The slowdown in China's economy is a major concern for the global economy. China is a major trading partner for many countries, and its slowdown will have a knock-on effect on global growth.The World Bank has warned that the global economy is facing a "severe slowdown" in 2023. The war in Ukraine and the high inflation are also weighing on global growth.

The slowdown in China's economy is another reminder of the challenges facing the global economy. The world economy is facing a number of headwinds, and it is unclear how long it will take for growth to return to pre-pandemic levels.

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