|
|
The International Monetary Fund (IMF) has again cut its outlook for China’s economic expansion this year as part of its semi-annual Global Economic Outlook report.
China’s economy will expand by 4.4 percent this year, the IMF now says.
Last October, the IMF had predicted 5.6 percent growth for China in 2022, then scaled back its outlook to 4.8 percent in January.
China has targeted 5.5-percent growth this year, enough to create 13 million jobs in a year when president Xi Jinping is running for a third presidential term.
That rate of growth was seen as easily possible until the Ukraine war roiled global markets and a new COVID upwelling prompted Beijing to lock down several key industrial areas and the world’s largest port in Shanghai.
China’s faltering economy places heavily indebted households, businesses, and local governments at risk of defaulting on their loans, the IMF warned.
The slowdown also could persuade more foreign investors to withdraw from the country, which could destabilize an already-fragile financial structure, The Wall Street Journal noted.
TREND FORECAST: This IMF forecast preceded the current wave of Beijing’s zero-COVID policy mandates in major cities across the nation. While China’s economy is growing by 4.4 percent in this year’s first quarter, momentum will be seriously blunted even after the lockdowns are lifted and restrictions eased.
The human spirit, as evidenced by the “dead at night” empty streets in many states in Western nations that did not bounce back after COVID restrictions were lifted, will resonate in China as well. What is lost is lost. And as data shows, even among the high end retailers making big bucks in China such as Gucci, sales are slumping as a result of the lockdowns.