Macro - Country Economic Forecasts - China
The prolonged lockdown in Shanghai plus highway controls in a number of provinces are severely disrupting domestic and port logistics. While land transport and industrial production have improved somewhat after a sharp slowdown in early April, we think the economic disruption will last into May – if not longer. Meanwhile, repercussions from the Russia-Ukraine war will weigh on China's external demand. We expect a stronger macro policy response to shore up growth, but it won't be effective as long as mobility is widely restricted, so risks to the outlook remain skewed to the downside. We plan to downgrade our 2022 growth forecast in our May baseline to substantially below the current 4.8% and will update the Q1 activity data to their latest position.
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