BEIJING – Better than economists’ forecasts, but in any case the worst data of the last forty years. The Gross Domestic Product of China is grew by 3% in 2022, the National Statistical Office communicated this morning. Apart from 2020, at the beginning of the pandemic, when GDP grew by 2.2%, last year’s growth was the weakest since 1976. Far from the target set by the Party in March of last year of 5, 5%, but which held up well thanks to the better-than-expected results for the fourth quarter of the year which give hope for a recovery. Indeed, in the last quarter, the Dragon’s economy grew by 2.9% over the previous yearexceeding the forecasts of economists who predicted a growth of 1.6%.
The Communist leadership faces a number of challenges to stay on track in 2023: Covid, a real estate crisis that has dragged down house prices, a collapse in exports due to the global economic slowdown and the first population decline of China in 60 years.
Other data communicated today bode well for Beijing: Frindustrial production increased by 1.3% compared to a year ago, exceeding forecasts by 0.1%; Retail Sales Contracted 1.8% vs. 9% Expected; fixed investments increased by 5.1% last year, broadly in line with forecasts; the urban unemployment rate fell last month to 5.5% from 5.7% in November.
“The foundations of the national economic recovery are not solid, since the international situation is still complicated and serious, while the threefold internal pressure of the contraction in demand, the supply shock and the weakening of expectations is still looming”, however warns the ‘National Statistical Office in a press release.
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“China’s fourth quarter GDP needs to be viewed with both concern and some relief. Exceeding expectations will allay fears of a slump. The data is still very weak: there is no hiding that the economy has taken a huge hit from the messy exit from the Covid-zero. However, we expect one solid recovery in Q2 2023”, write Chang Shu and Eric Zhu in their report for Bloomberg.
The World Bank forecasts that in 2023 China will return to growth at around 4.3%, other estimates are close to 5% – an objective also declared by the communist leader Xi Jinping.