• China may not meet its economic growth goal for the year.
• Covid restrictions are putting pressure on the second largest economy in the world.
• Politburo, which is the top policy-making body of the ruling Communist Party said that it wants to keep growth within “a reasonable range”.

China has hinted that it might not meet its economic growth goal for the year. Covid restrictions are putting pressure on the second largest economy in the world.

Thursday, the Politburo, which is the top policy-making body of the ruling Communist Party, said that it wants to keep growth within “a reasonable range”

It didn’t say anything about the official growth goal of 5.5% that it had set earlier.

China is still following its zero-Covid policy, which has led to full or partial lockdowns in many major cities.

The 25-member Politburo, which is led by President Xi Jinping, said in a statement after its quarterly economic meeting that leaders would “strive to achieve the best results possible”

But it also told the stronger provinces to work hard to reach their growth goals.

Analysts pointed out that the GDP wasn’t mentioned, even though economists had already said it would be hard for China to reach its goal of 5.5 percent.

Iris Pang, chief China economist at ING Bank told, “The 5.5% growth target is no longer a must for China,”

They also said that China was asking the bigger provinces to help out the ones that were hit harder by the lockdown.

In a note, Ting Lu, Jing Wang, and Harrington Zhang from Nomura said, “Beijing requested that provinces which are relatively well-positioned should strive to achieve economic and social targets for this year,”

“We think Beijing is suggesting that GDP growth targets for provinces with less favourable conditions, especially for those that were hard hit by the Omicron variant and lockdowns, could be more flexible.”

China said earlier this month that in the second quarter of this year, its economy shrunk by a lot.

During this time, large cities in China, like the financial and manufacturing centre Shanghai, were put on full or partial lockdown.

China’s property market, which used to be booming, is also in a deep slump, and home sales have been going down for 11 months in a row.

Several Chinese builders have stopped building homes that have already been sold because they are worried about their cash flow.

In the past few weeks, some people who bought homes have said they won’t pay their mortgages until the work is done.
Due to the pandemic, China made the rare decision to give up on its GDP goals in 2020.

GDP shows how big an economy is one of the most important ways to measure how well or badly an economy is doing is to look at how much it is growing or shrinking. Economists and central banks keep a close eye on this.

It also helps businesses figure out when to grow and hire more people or when to invest less and lay off workers.

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