China GDP Data Likely To Disappoint On Zero Covid Policy Exit Effect
China’s economy is widely seen slowing in the fourth quarter of 2022 as the pandemic related restrictions were lifted towards the end of the year providing little support to retail sales, industrial output and exports.
Gross domestic product is forecast to grow only 1.8 percent on a yearly basis in the fourth quarter, after expanding 3.9 percent in the third quarter.
The National Bureau of Statistics is set to release the data on January 17 at 09:00 PM ET.
Tuesday’s data is set to confirm that Beijing failed to achieve its growth target of ‘around 5.5 percent’ in 2022.
Nonetheless, the second- largest economy is expected to recover this year after the zero-Covid policy dragged down the activity in 2022.
China’s provinces are projecting economic growth of 5-6 percent for 2023. The government’s full year target will be announced at the National People’s Congress in March.
The Chinese government had delayed its third quarter GDP data in October as the release coincided with the 20th party conference of the ruling Communist Party.
Last week, the World Bank said activity in China remains vulnerable to a prolonged drag from the real estate sector and continued pandemic-related disruptions. The lender forecast China’s economy to expand 4.3 percent in 2023 and 5.0 percent next year.
The NBS is also set to publish retail sales, industrial production, fixed asset investment and unemployment data on Tuesday.
After declining 5.9 percent in November, economists forecast retail sales to fall again by 8.6 percent in December on depressed household spending.
The year-on-year growth in industrial output is seen falling to 0.2 percent from 2.2 percent in November.
Fixed asset investment in the whole year of 2022 is forecast to climb 5.0 percent, slower than the 5.3 percent increase in the January to November period.
Earlier on Monday, China’s central bank left its medium-term lending facility rate unchanged and added more funds to maintain sufficient liquidity in the financial system.
The People’s Bank of China added CNY 779 billion via one-year medium-term lending facility. The rate on MLF was kept unchanged at 2.75 percent. The MLF acts as a guide to the loan prime rate, which is the benchmark lending rate.
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