BEIJING (Reuters) – Profits at China’s industrial firms fell at a faster pace in January-October as a resurgence of COVID-19 cases and a growing property crisis weighed on -activity and demand of the factory.
Industrial profits fell 3.0% in the first 10 months of 2022 from a year earlier, after a 2.3% fall in January-September, according to data from the National Bureau of Statistics (NBS) released on Sunday.
The bureau has not reported individual monthly figures since July.
With new cases of COVID-19 in China reaching record levels and more cities imposing strict measures against the virus, consumption is falling sharply in the world’s second largest economy, while the exports are giving way to cooler global demand.
Some analysts now believe that GDP may contract in the current quarter from the third quarter, and have cut their forecasts for 2023, predicting that the road to reopening the economy will be slow. and bumpy.
Analysts at Nomura now expect fourth-quarter GDP to fall by 0.3% from the previous quarter, and have cut their fourth-quarter growth forecast on a year-on-year basis to 2.4% from 2.8%.
Similarly, analysts from Oxford Economics have also cut their GDP forecasts for 2022 and 2023 as they believe an extension of lockdown measures is expected.
“The risks to our near-term outlook are now skewed downwards. Our baseline view already incorporates a bumpy path to a broader reopening in H2 2023, featuring episodic flare-ups in the near term due to seasonal vulnerabilities heading into the winter/influenza season , “said the analysts of Oxford Economics.
To shore up the struggling economy, authorities have rolled out a number of measures recently, including moves to ease some of the COVID-19 curbs and provide financial support to the struggling property market, which have bolstered market sentiment .
On Friday, China said it would cut the amount of cash banks must hold as reserves for the second time this year, releasing about 500 billion yuan ($69.8 billion) in liquidity in -long.
Last month, China’s industrial production rose 5.0% from a year earlier, missing expectations for a 5.2% rise in a Reuters poll and falling short of the 6.3% growth seen in September.
The industrial profit data covers large firms with annual revenue above 20 million yuan from their core operations.
($1 = 7.1642 renminbi Chinese yuan)
(Reporting by Liz Lee, Ella Cao and Liangping Gao; Editing by William Mallard and Kim Coghill)