China’s Zero-COVID Policy Puts Downward Pressures on China and ASEAN4

Research Director：Kei-Ichiro INABA

  Chief Forecaster

Akira TANAKA

  Senior Economist

2022/06/14

JCER released June 2022 forecast on Asian Economies.

China/ASEAN4 Economic Outlook 

• The year-on-year growth rate of China’s real GDP increased from 4.0% in Q4 2021 to 4.8% in Q1 2022 due to firm private consumption and local governments’ infrastructure investment. The economy will slow sharply in Q2 2022 due to harsh lockdown measures implemented in major cities in response to the spread of COVID-19. Although these measures will be relaxed gradually in and after Q2 2022, the rebound of private demand will be curbed, assuming that some restrictive measures will remain by the end of September. Meanwhile, the local governments’ infrastructure investment will continue to increase, thereby underpinning the economy. The real GDP growth rate is projected to be 5.0% in 2022 and 5.5% in 2023.
• The year-on-year growth rate of ASEAN4’s real GDP increased from 4.4% in Q4 2021 to 4.9% in Q1 2022 due to firm private consumption. The private consumption is expected to remain robust as the people’s mobility improves with the relaxation of COVID-19 related restrictions in and after Q2 2022. Meanwhile, ASEAN4’s exports will fall in Q2 2022, and their recovery will be modest in Q3 2022. In these quarters, the exports will receive downward pressures from China’s economic slowdown and distortions in international trade and specialization, both of which will be caused by China’s restrictive measures against COVID-19. The real GDP growth rate is projected to be 4.9% in 2022 and 4.7% in 2023.

【China/ASEAN4 Economic Outlook】