Q1 Macro Data Should Be Bad, But Probably Won’t Be

As the economic consequences of the Shanghai lockdown and COVID restrictions accumulate, China’s leadership has changed neither its full-year 5.5% GDP growth target nor its “zero COVID” policies. This creates significant challenges in presenting a credible economic narrative amidst a slowing economy, with a flagging property sector and widespread COVID-related disruptions. This note discusses Beijing’s options in presenting Q1 2022 data next week, and the tradeoffs involved in different stories.

Posted April 14, 2022
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