China’s growth slumps sharply after Covid lockdowns

China’s growth has slumped sharply after Covid lockdowns. 

The world’s second-largest economy shrank 2.6 per cent in the second quarter of the year – and experts warned that officials could be hiding the worst. 

It comes as the global economy faces a period of turmoil. The eurozone is in chaos, as an energy shortage has left inflation set to hit 7.6 per cent and output predicted to grow by just 2.6 per cent. Consumers are tightening their belts – in Europe new car sales fell 15.4 per cent last month, the lowest June total since 1996. 

Mario Draghi’s Italian government has collapsed, with borrowing costs up and the stock market languishing. 

The euro is hovering around parity with the dollar, a depth not plumbed since 2002. 

And US experts fear for the global economy. Larry Fink, chairman of the world’s biggest investment firm Blackrock, said: ‘2022 ranks as the worst start in 50 years for both stocks and bonds.’ 

Fink said the first half of 2022 had brought ‘financial and economic challenges that investors have not seen in decades’. Economists said it was hard to see how China would hit its target growth of ‘around 5.5 per cent’ this year.