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Shanghai's economy slows as COVID-19 deals blow to industry, retail

Shanghai's economy slows as COVID-19 deals blow to industry, retail

Workers dress up in protective suits amid the coronavirus disease (COVID-19) outbreak in Shanghai, China April 23, 2022. REUTERS/Brenda Goh

BEIJING: The economy of Shanghai, China's most populous city, slowed in the first quarter from the end of 2021, hurt by rare declines in industrial output and retail sales that were hammered by the country's most serious COVID-19 outbreak.

Shanghai's gross domestic product (GDP) grew 3.1 per cent in the first quarter from a year earlier, the local statistics bureau said on Saturday (Apr 23), significantly less than the 4.8 per cent growth in the national GDP during the same period announced earlier. In 2021, Shanghai's GDP rose 8.1 per cent.

"In January-February, the city's economic operation was stable, but due to the impact of the COVID outbreak in March, the first quarter was marked by stability followed by a decline," the city's statistics bureau said in a statement.

Shanghai started reporting COVID-19 cases in the latest outbreak in early March, with authorities declaring a lockdown of the entire city of 25 million people in early April when infections escalated.

The economic slowdown in Shanghai, which did not publish GDP data for the fourth quarter of 2021, is widely expected to have worsened in April. Its GDP contracted 6.7 per cent in January-March 2020 when the new coronavirus first emerged.

Output of Shanghai's vast industrial sector plunged 7.5 per cent year-on-year in March after stringent lockdown measures halted some production, a city official said on Friday.

For January-March, industrial production grew 4.8 per cent from a year earlier, the Saturday data showed.

Shanghai's first-quarter retail sales, a key gauge of consumption, fell 3.8 per cent year-on-year, swinging from 3.7 per cent growth in the first two months.

In March alone, retail sales nosedived by 18.9 per cent.

In the first quarter, the city's consumer prices rose 1.8 per cent from a year earlier, with prices in January-February up 1.6 per cent year-on-year and accelerating in March to a 2.2 per cent clip.

The higher consumer inflation came as Shanghai residents complained about food and basic supplies during the lockdown, with some saying prices of vegetables had gone up by five to 10 times of levels before the outbreak.

Job creation also slowed, with Shanghai reporting 192,600 new jobs in the first quarter, a drop of 26,200 from the year-earlier quarter.

Source: Reuters/gs

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