Covid-19 in China hits record and economic outlook worsens

Covid-19 in China hits record and economic outlook worsens
Covid-19 in China hits record and economic outlook worsens

REUTERS/Thomas Peter

Brokerage Nomura cut its fourth quarter GDP forecast for China to 2.4%

China has seen a record number of Covid-19 infections today, with cities across the country imposing lockdowns, mass testing and other restrictions that are stoking frustration and dampening prospects for the world’s second-largest economy.

The new wave of infections, nearly three years after the outbreak of the pandemic in the central city of Wuhan, casts doubt on investor expectations that China will ease its strict Covid-zero policy soon, despite recent more targeted measures.

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Brokerage Nomura cut its fourth-quarter China GDP forecast to 2.4% from a year earlier from 2.8% and lowered its full-year growth forecast to 2.8% from 2.9%. %, which is far short of China’s official target of around 5.5% this year.

“We believe reopening will still be a protracted process with high costs,” Nomura wrote, also lowering his forecast for China’s GDP growth for next year from 4.3% to 4.0%.

China’s leadership has stuck with President Xi Jinping’s Covid-zero policy even as much of the world is trying to coexist with the virus, saying it is necessary to save lives and prevent the medical system from being overwhelmed.

The 31,444 new local Covid-19 infections on Wednesday broke a record set on April 13, when Shanghai’s commercial hub was hit with a citywide lockdown of its 25 million residents that was to last for two months.

This time around, however, the big outbreaks are numerous and far apart, with the biggest in the southern city of Guangzhou and southwest Chongqing, although hundreds of new infections are reported daily in cities including Chengdu, Jinan, Lanzhou and Xian. .

While the official number of cases is low by global standards, China is trying to eradicate all chains of infection, a tougher challenge as the country faces its first winter battling the highly contagious Omicron variant.

China has recently started to loosen some rules on mass testing and quarantine as it seeks to avoid sweeping measures such as city-wide lockdowns.

Instead, cities have used more localized and often unannounced lockdowns. Many people in Beijing said they had recently received warnings about three-day lockdowns in their housing developments.

The article is in Portuguese

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