Unemployment also surged to the second highest level on record.
The urban jobless rate hit 6.1% in April, vanaf 5.8% in March — which was already at a 21-month high. The only time China’s jobless rate was higher was in February 2020.
Asian stock markets struggled for gains after the weak data
. Hong Kong’s Hang Seng (HSI)
, China s’n Shanghai Composite (SHCOMP)
, and Korea’s Kospi (KOSPI) all reversed opening gains
, down between
0.3% en 0.5%.
China’s economy was off to a good start in 2022
, recording a
4.8% growth for the first quarter
But Beijing’s efforts to curb its worst Covid outbreak in two years have dealt a hefty blow to activity
Sover, ten minste 31 cities in the country remain under full or partial lockdown
, according to CNN’s latest calculations
, the country’s financial center and manufacturing hub
, has been under lockdown for more than six weeks
. During this period
, many companies have been forced to suspend operations
, including automakers Tesla (TSLA) and Volkswagen and iPhone assembler Pegatron
“We think Q2 GDP growth will likely turn negative,” said Zhiwei Zhang, president and chief economist for Pinpoint Asset Management, Maandag.
“The government faces mounting pressure to launch new stimulus to stabilize the economy,” Zhang said.
The leadership in China is aware of the economic pains and has taken some steps recently to bring relief.
The People’s Bank of China announced Sunday that it would cut the mortgage rate for first-time homebuyers, in a move to lift the ailing property market.
Afsonderlik, the Shanghai government said the city will gradually open shops, restaurante, and salons from Monday, which will be a relief for its 25 miljoen inwoners.
The government has also recently pledged to prop up the economy through more infrastructure spending and targeted monetary easing to support small businesses
Maar “the risks to the outlook are tilted to the downside, as the effectiveness of policy stimulus will largely depend on the scale of future Covid outbreaks and lockdowns,” said Tommy Wu, lead China economist for Oxford Economics, Maandag.
“We forecast GDP to grow 4% hierdie jaar, with a quarterly contraction in the second quarter before returning to growth in the second half.”
– CNN’s Beijing bureau contributed to this report.