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Excluding the 2.2% expansion after the initial COVID hit in 2020, it’s the worst showing since 1976 – the final year of the decade-long Cultural Revolution that wrecked the economy. Other indicators for December such as retail sales and factory output, also released along with GDP data, beat expectations but were still weak. „Activity data in December surprised broadly to the upside, but remains weak, particularly across demand-side segments such as retail spending,“ Louise Loo, senior economist at Oxford Economics, said in a note. The“ data so far supports our long-held view that China’s reopening boost will be somewhat anaemic at the beginning, with consumer spending being a key laggard in the initial stages,“ Loo said. Others including Hao Zhou, chief economist at GTJAI, expect a steady improvement in consumption and investment, underpinned by China’s reopening and government-led infrastructure investment. Growth is likely to rebound to 4.9% in 2023, as Chinese leaders move to tackle some key drags on growth – the „zero-COVID“ policy and a severe property sector downturn, according to a Reuters poll. Most economists expect growth to pick up from the second quarter.
