Australian Economy

BHP, Fortescue sink; iron ore falls, China GDP ahead

China’s economic growth slowed sharply in the second quarter, expanding 0.4 per cent year-on-year and missing expectations, official data showed on Friday, as widespread lockdowns to curb record COVID-19 cases hit industrial activity and consumer spending.

Gross domestic product (GDP) had been forecast to expand 1 per cent in the April-June quarter from a year earlier, according to a Reuters poll of analysts, slowing significantly from 4.8 per cent in the first quarter.

On a quarter-on-quarter basis, GDP fell 2.6 per cent in the second quarter, compared with expectations for a 1.5 per cent decline and a revised 1.4 per cent gain in the previous quarter.

For the first half of the year, GDP grew 2.5 per cent.

Full or partial lockdowns were imposed in major centres across the country in March and April, including the commercial capital Shanghai.

While many of those curbs have since been lifted, and June data offered signs of improvement, analysts do not expect a rapid economic recovery. China is sticking to its tough zero-COVID policy amid fresh flare-ups, the country’s property market is in a deep slump and the global outlook is darkening.

A Reuters poll forecast China’s growth to slow to 4 per cent in 2022, far below the official growth target of about 5.5 per cent.

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