As China locks down cities in increasingly major ways in adherence to its zero-COVID policy, residents and economists alike have expressed intensifying concerns about the potential impact on the supply chain.
The spread of shutdowns across the nation has economists tempering growth expectations as they try to predict the financial damages that could have worldwide consequences.
“More pain will come in Q2 (quarter two),” Iris Pang, chief economist, Greater China, at ING, said in a report detailing China's Gross Domestic Product (GDP) growth. “Further impacts from lockdowns are imminent.”
Pang said the impacts of the severe lockdowns have yet to be seen and expectations may need to be curbed further. On the manufacturing side, Pang said, "For factories, the problem of lockdown comes from slow delivery services and port disruptions."
The full or partial lockdowns have expanded across large cities, such as Shanghai, affecting 373 million people across 45 Chinese cities, accounting for more than one-fourth of the country's population and 40% of its total economic output, according to an article in The Wall Street Journal. The sum also makes up 12% of the Asian nation's GDP, China-based Gavekal Dragonomics reports.
Despite the increases, Pang predicts that "Shanghai's GDP for April will be very poor" as a result of the ongoing closures but she is holding off from further reductions in growth forecasts at this time.