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AlwaysFree: China Seen Posting Slowest Economic Growth In Over A Year

Author: SSESSMENTS

China’s economy in the fourth quarter is estimated to have grown at the slowest pace in more than a year, dragged by deepening property market crisis and disruptions from COVID-19 outbreaks. Economists in a Bloomberg survey estimate that the world’s second-largest economy expanded by 3.6% in the final quarter of 2021, the slowest since the second quarter of 2020. Beijing is also expected to report slowing growth in retail sales, industrial output, and fixed-asset investment. The government is due to release these data on Monday.

The credit crunch in China’s property sector has shown little signs of easing. Economists project that the growth in China’s property investment slowed to 5.2% in 2021, the slowest since 2015 when the government campaigned to cut home inventories. The property slump and subdued infrastructure investment are expected to have slowed down fixed-asset investment growth to 4.8%.

Consumer spending has not recovered to pre-pandemic levels due to sporadic virus outbreaks, which prompted repeated localised lockdowns. Economists saw retail sales growth decelerate to 3.8% year-on-year in December. Slowing income growth and worsening job market also weighed on consumer confidence.

Analysts said that the multi-sector slowdowns are boosting the case for the central bank to lower borrowing costs. The majority of surveyed economists believe that the People’s Bank of China will keep the one-year medium-term lending facility unchanged at 2.95%, but the chorus is growing for a cut. On Monday, the PBOC will decide whether to cut benchmark interest rates and roll over maturing policy loans of CNY500 billion ($79 billion) ahead of the GDP data release.

Tags: All Products,AlwaysFree,Asia Pacific,China,English,NEA

Published on January 14, 2022 10:14 AM (GMT+8)
Last Updated on January 14, 2022 10:14 AM (GMT+8)