According to official data from China’s National Bureau of Statistics, the country’s economic growth rate in the second quarter only reached 0.4%, missing expectations.
June’s industrial production is also below expectations, increasing by 3.9% year on year, under the 4.1% forecast.
It is grim data for the second quarter due to strict Zero-Covid policies.
Multiple news outlets on Friday reported that they expected slow data in the April-June quarter.
The growth of 0.4% is the slowest in over two years, since the first quarter of 2020 when the coronavirus outbreak started in Wuhan.
After two months of lockdowns in Shanghai and other parts of the country, retail sales and industrial production took a hit, not to mention devastating social impacts on residents.
June data shows a modest recovery underway as lockdowns ease, but uncertain growth lies ahead.
Nathan Chow, a senior economist at DBS Bank in Singapore, told Reuters that “the worst of the downturn is over. But recovery in the second half is unlikely to be too strong.”
China set a growth target of 5.5% for the year, but experts say it’s unlikely to be achieved. Instead, most economists estimate the number should be around 4%.
China officially lifted lockdowns in May and June, but the new Covid variant might threaten more lockdowns.
The Washington Post reported that Lanzhou city had imposed a seven-day lockdown for four city districts while Shanghai ordered millions of residents to be tested again.
According to the Wall Street Journal, the disruptions persisted even after the lockdowns for some businesses.
The outlet cited a fiber-optic equipment maker Shenzhen DYS Fiber Optic Technology suffering from the lockdown because the workers still couldn’t return to the factory because of travel restrictions.