Consumer spending in China edged down in March amid renewed wave of COVID-19 leading to lockdowns leaving millions of people at homes and driving joblessness to their highest level since the beginning of the pandemic two years back.
Official data showed gross domestic product growth to first quarter at 4.8%, underscoring faster than expected economic growth while spending activity data in March showed notable slump.
Retail sales contracted 3.5% from a year ago, the first decline since July 2020. Industrial output rose 5%, above the 4% median forecast of Bloomberg. Investment growth in the first quarter slowed to 9.3%.
The economy expanded at a slower pace of 1.3% on quarter-on-quarter basis, marking weakening growth prospect. Jobless rate climbed to 5.8% in March which is the highest since May 2020.
“I’m worried about employment, because it’s one of the government’s main objectives,” said Liu Peiqian, China economist at NatWest Group Plc, as reported by Bloomberg.
“The surge in jobless rate will have an impact on the economy in the longer term, as employment supports activities from production to consumption.”
Following the data, Chinese benchmark index CSI 300 is trading down by nearly 1%.
According to Bloomberg’s economists, the March activity data shows the underlying concern of Chinese economy being in the worst shape since early 2020 when the pandemic took a toll on the economy.
