China’s strict zero-COVID policy could lead another prolonged supply chain disruption, according to an economist of Moddy’s Analytics.
The bottlenecks have lasted for about a year now but are expected to “materially ease in the early months of this year,” said Katrina Ell, a senior economist for Asia-Pacific at Moody’s Analytics to CNBC.
“So we would start to see material downward pressure on things like producer prices, input prices that kind of thing. But given China’s zero-Covid policy and how they tend to shut down important ports and factories — that really increases disruption,” she added.
China’s zero-Covid policy “really does increase the downside risks for material improvement in supply chains,” Ell noted, saying there will be “important ramifications for inflation and also central bank policy-making in the next couple of months.”
