Strict lockdown cuts down China’s GDP by half

The strict lockdowns are likely to cost the country at least USD 46 billion a month or 3.1 per cent of GDP and the impact could be double if more cities tighten restrictions according to an economist at the Chinese University of Hong Kong.

In the last few weeks, China has seen its worst Covid outbreak since the initial height of the pandemic in early 2020 when the economy slumped. The latest surge in cases could hit first-quarter gross domestic product by at least half of a percentage point. The strict lockdowns are likely to cost the country at least USD 46 billion a month or 3.1 per cent of GDP and the impact could be double if more cities tighten restrictions according to an economist at the Chinese University of Hong Kong.

The Lockdown of Shanghai’s 26 million people is testing the limits of China’s hardline “zero-Covid” strategy, which is shaking markets far beyond the country’s borders. China’s largest city alone could reduce China’s real GDP by 4 per cent. Millions of Shanghai residents have to stay home and undergo coronavirus testing as the financial hub tries to stamp out a growing Omicron outbreak.

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