As per a data released on Monday, China’s Gross Domestic Product (GDP) grew 4.9 per cent in July-September.
Though, this is the weakest pace since the third quarter of 2020, also slowing from 7.9 per cent in the second quarter.
On a broad spectrum, China’s economy grew at the slowest pace in a year in the third quarter. Various factors from power shortages, supply bottlenecks, COVID-19 outbreaks to raising heat on policymakers and the property sector issues have affected the country’s growth.
This marks a further deceleration from the 18.3 per cent expansion in the first quarter. This can said to be a Covid-induced slump.
As per a Reuters poll of analysts China’s GDP was expected to rise 5.2 per cent in the third quarter.
The data shows, on a quarterly basis, growth eased to 0.2 per cent in July-September from a downwardly revised 1.2 per cent in the second quarter.
When it comes to India, the IMF predicts that the impact of Covid-19 on investment and human capital could prolong the economic recovery and also affect our medium-term growth; but it could be faster than expected because of the vaccination speed and economic reforms.
China remains world’s second-largest economy, though it seems to have rebounded from the pandemic but the recovery is losing steam.
Now global worries abound about a possible spillover of credit risk from the property sector of China. This comes as China Evergrande Group struggles with more than 300 billion dollars of debt.
Also, there are fears of a persistent property bubble that could undermine the China’s long-term ascent.
However, the Chinese Premier Li Keqiang stressed that China has ample tools to cope with economic challenges despite slowing growth.
In the Indian context, the second wave of Covid-19 had resulted in another sharp fall in activity.
Moreover, a persistent negative impact of Covid-19 on investment, human capital, and other growth drivers could prolong the recovery process. At the same time India benefits from favourable demographics also.
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