QNB says China’s economic outlook is weakened by zero-covid policy – The Peninsula

QNB says China’s economic outlook is weakened by zero-covid policy – The Peninsula

Doha: QNB highlighted Saturday in its weekly commentary that China's Zero-COVID policy has weakened the economy. It noted that the policy was highly effective at suppressing the initial wave of the pandemic, but highlighted that it is also a headwind to the country's GDP growth.

The bank maintained that while the country can introduce some policies to support the economy, these policies haven't managed to drive growth yet.

The report predicted that the combination of headwinds from the Zero-COVID policy and relatively ineffective policy stimulus will lead to a weak economic recovery in China.

"We expect these two factors to lead to Chinese GDP growth of only 4.8% in 2022 and 5.3% in 2023, well below its pre-pandemic trend," the report said.

The report pointed out that new infections continue to appear in China despite the Zero-COVID policy because Omicron is highly contagious and can exceed the protection provided by vaccines. As a result, officials are engaged in "continuous monitoring" of new cases, tracking outbreaks by conducting tests and tracing contacts, and then imposing isolation through intensive local lockdowns. The implementation of this approach involves the establishment of tens of thousands of screening kiosks across China's cities and economic centers, which is particularly evident