Business

A new coronavirus outbreak will slow China’s economic growth

A new coronavirus outbreak will slow China's economic growth

China’s largest outbreak in a year has forced authorities to impose new restrictions to combat the infection. Along with the spread of the coronavirus, these measures will also slow the country’s economic growth, CNN reported.

In late July, the “delta” strain of spread across China, quickly catching more than half of 34 provinces and causing about a thousand confirmed cases. In response, authorities have reactivated a strategy to contain the infection. Several cities are again closed for lockdown, flights are canceled, entertainment venues are shut down, and foreign trade is suspended. Mass testing for the coronavirus has been deployed in the country.

Such events have prompted economists to lower growth forecasts for the Chinese economy. Analysts at Goldman Sachs expect the nation’s GDP to grow just 2.3 percent in the third quarter from the previous quarter, though it was originally expected to rise 5.8 percent. The restrictive measures will severely cut consumption and service delivery. Tourism, catering, and entertainment establishments will be the worst hit.

Nevertheless, specialists are still optimistic about the annual outlook for the recovery of the world’s second-largest economy. Goldman Sachs expects it to grow by 8.3 percent through 2021. That figure is only slightly below the previous estimate of 8.6 percent.

In August, a new outbreak of coronavirus occurred in Wuhan, China. The city administration promptly sealed off the area where the virus was found and conducted general population testing. However, these steps did not help prevent the infection from spreading across the country.



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