According to Asia Development Bank’s (ADB’s) new report published on September 21, the rest of the developing Asian countries have surpassed China after 30 years. The data predicted zero-COVID policy is the cause of the economic decline, and food and energy cost has pushed up high inflation.

The People Republic of China’s (PRC’s) economy will be 3.3% and 4.5% in 2022 and 2023, respectively. Meanwhile, growth forecasts for developing Asia will be 4.3% for 2022 and 4.9% for 2023.

In the second half year, the government is anticipated to boost growth. Priority industries include real estate and youth unemployment.

ADB Officer-in-Charge for the PRC Hao Zhang said, “Growth has slowed sharply as COVID-19 lockdowns disrupted economic activity. However, we expect economic growth to pick up in the second half of this year, with services recovering in line with improving household demand.”

Though the region is showing signs of recovery, ADB blamed China’s zero-COVID policy for creating problems in the real estate sector and the domestic markets and slowing down economic growth, also affecting global trade.

In addition, the Asian Development Outlook (ADO) gives that the rate of price increases would quicken even further to 4.5% in 2022 and 4% the following year — an upward adjustment from July’s estimates of 4.2% and 3.5%, respectively, citing increased inflationary pressures from food and energy expenses.

China’s consumer price inflation is forecast to average 2.3% in 2022 and up 0.2% in 2023. Food inflation will likely continue high in the second half of this year, driven by rising pork costs.

The outbreaks of COVID-19 have prevented the mainland from fully recovering domestic consumer demand, from the property market getting worse, and from mounting financial system risks, particularly at small banks, which could temporarily disrupt the market and lead to policy interventions.

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