China is likely to suffer Losses due to the Resurgence of Covid
China is estimated to suffer a sharp decline in economic activity in March as it witnesses a massive resurgence of COVID-19 cases and lockdowns hit consumers and factories. Although it may witness strong first-quarter growth due to a strong start early this year. Data that is estimated to be released today, is likely to show the gross domestic product (GDP) grew 4.4 in January-March from a year earlier, outperforming the fourth quarter's 4.0% pace due to a surprisingly phenomenal start in the first two months. However, on a quarterly basis, GDP growth is estimated to decline to 0.6% in the first quarter from 1.6% in October-December.
According to Separate data on March activity, especially retail sales is likely to indicate an even steeper decline. This is mainly because the economy has been hit hard by China's strict efforts to contain its worst COVID outbreak since the coronavirus first emerged in the city of Wuhan in late 2019. Analysts further elaborated that April readings will likely be worse, with lockdowns in commercial center Shanghai and elsewhere getting extended. Some economists also indicate the risks of a recession are increasing.