Retail sales in China record a two-year low amid COVID damage

By bfnadmin  | Date: 2022-05-15

    Retail sales in China record a two-year low amid COVID damage
                    The impact of COVID-19 has reportedly led to a fall in China’s retail sales. According to reliable sources, the numbers have declined to the lowest in two years with a plunge in factory output. The second largest economy in the world has persisted with stringent coronavirus measures, stifling global supply chains, with several cities, including Shanghai, facing strict COVID restrictions until recently.

Officials have pledged to support growth, reducing the overall mortgage rate for people buying their home for the first time. However, it is being warned that the country’s zero-COVID strategy could muffle any positive impact.

According to Fu Linghui, a Spokesman for the National Bureau of Statistics, the pandemic has had a massive effect on the nation’s economic operations, with the outbreak having a considerably larger-than-expected impact. However, Linghui anticipates the hit to be short term followed by a gradual recovery.

For the record, the industrial production growth sank 2.9% on-year, reflecting damage from transportation woes and shuttered factories. This came as officials ramped up COVID restrictions in April 2022. The figure is down from a growth of 5% in the month of March and is the weakest since early 2020.

Further, it is to be noted that the latest cut came on Monday, 16th May 2022, when the National Bureau of Statistics announced data depicting an 11.1% on-year shrink in retail sales in the month of April.

According to Tommy Wu, Lead of China economist at Oxford Economics, the picture came as China battled its worst COVID outbreak since the early days of the pandemic. Wu further added that household consumption was even more affected and any disruption to the activity is likely to extend into June with a possible rebound to take weeks.

As stated by financial services firm Gavekal, there have been no significant developments despite repeated indications from the authorities regarding meaningful policy easing. However, with an increase in economic damage and the struggle for reopening Beijing and Shanghai, officials may be forced to take steps sooner.

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