China's shift from tough COVID policies, with its promise of driving an economic recovery next year, will instead likely depress growth over the next few months as infections surge, bringing a rebound only later in the year, economists said.
People sit outside a cafe after some curbs were lifted as coronavirus disease outbreaks continue in Beijing, December 7, 2022. REUTERS/Thomas Peter, with its promise of driving an economic recovery next year, will instead likely depress growth over the next few months as infections surge, bringing a rebound only later in the year, economists said.
"Compared with other developed countries, medical resources in China are somewhat insufficient," said Nie Wen, a Shanghai-based economist at Hwabao Trust, who has cut his China growth forecast for the first quarter to 3.5%-4% from 5% previously. Lockdowns and quarantines have disrupted supply chains and depressed consumer spending, and eventually triggered widespread protests that spurred the recent policy shift.With China likely facing waves of COVID infections after the relaxations, the benefits of reopening are expected to arrive with a significant delay.
HSBC said in a research note that it expected growth above 5% in 2023, citing the relaxed anti-COVID measures and supportive fiscal and monetary policies."Lockdowns mean people can't travel, people can't consume, can't work," said Rich Nuzum, global chief investment strategist at Mercer. "The potential reopening could bring inflationary challenges to China, with a surge in demand, especially the accelerating household consumption, and short-term disruption to labour supply, production and supply chains amid an inevitable exit wave of new cases," said Bruce Pang, chief economist at Jones Lang Lasalle.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Models predict massive wave of disease and death if China lifts ‘zero COVID’ policyChinese authorities are gingerly moving to ease the burden of the country’s COVID19 lockdowns, quarantines, and constant testing—but new models show why the government still wants to keep a lid on.
Read more »
China scraps some of its most controversial Covid rules, in significant step toward reopening | CNNChina announced sweeping changes to its national pandemic response on Wednesday, the clearest and most significant sign yet that the country is moving away from its strict zero-Covid approach.
Read more »
China eases nationwide Covid restrictions after protestsChina loosens nationwide Covid restrictions following protests against the hardline strategy that grew into calls for greater political freedoms
Read more »
Forex Today: Markets remain cautious despite easing of Covid curbs in China, eyes on BOCForex Today: Markets remain cautious despite easing of Covid curbs in China, eyes on BOC – by eren_fxstreet Currencies Majors BOC Commodities Macroeconomics
Read more »