As per the expected predictions, China’s economy didn’t expand that much in recent months. The causes which have been shown by the economists include; COVID-19 outbreaks, steady manufacturing activities, high raw material costs. All these cause impediments to economic growth.
Official data showed on Thursday that Gross domestic product (GDP) increased by 7.9% in the April-June quarter. In a Reuters poll of economists, the expected range was 8.1 %.
Unfortunately, soon the economy lost this momentum and started falling down in the first quarter of the year. Covid-19 put-paid to the economy of China.
According to UOB economist Woei Chen Ho in Singapore, “The numbers were marginally below our expectation and the market’s expectation—-I think the momentum is fairly strong, our greater concern is the uneven recovery that we’ve seen so far and for China, the recovery in domestic consumption is very important…Retail sales this month were fairly strong and that may allay some concerns.”
China’s economy has been dealing constructively amid the COVID-19 crisis. Their profound strategies regarding establishing compact policies to strengthen the economy. Despite such a hectic struggle, the economy lost its momentum in recent months.
How did it reach to such precarious position?
One should tease the mind, that amid pandemic the economy was much stable. How it reached this precarious position?
Some of the factors which paved the path for the economic downturn are;
- Higher raw material costs ( means of production are surging, which is getting hard for people to manage)
- Supply shortages ( Due to COVID countries have slowed down the exchange of goods)
- Consumers’ role: COVID outbreak has locked their pockets.
The National Bureau of statistics declared that GDA increased by 1.3% in the April-June session, which surpassed the expected limit. of 1.2% in Reuters poll.
The NBS has conducted a survey to find out China’s economic growth over the last quarter. However, it didn’t yield so far, and by the underlying assumption, it lays by 0.3.
“The domestic economic recovery is uneven,” said Liu Aihua, an official at the NBS at a briefing on Thursday.
Further, she uttered, “We must also see that the global epidemic continues to evolve, and there are many external instabilities and uncertain factors,”
Data unconcealed that China’s export is surging high as expected in June but unfortunately the overall trade growth may slump in mid-2021, after damage by COVID.