- Annual growth for 2020 stood at 2,3%
- Least growth in over 40 years
- World bank predicts 7.9% growth in 2021
- US economy forecasted to have dived by 3.6% 2020
Against all odds, China has become the only major economy in the world to record positive growth in the year 2020.
According to China’s Bureau of Statistics, the country’s economy grew by 2,3% last year, despite the intense lockdowns enacted by the Chinese government in January 2020 in order to curb the spread of COVID-19 which had its genesis in the country’s Wuhan Province.
The lockdown and subsequent shutdowns by other countries which China exports to, was a serious blow to the economy which is largely hinged on manufacturing and export as these activities were brought to a standstill with the closure of factories and manufacturing plants resulting in a -6,8% contraction of the economy in the first quarter of 2020.
However, subsequent to the lifting of lockdowns, China reported a 6.5% growth in the final quarter of the year driven mainly by growth in demand for Chinese goods in December 2020. The growth in global demand for Chinese goods was despite a 4% increase in the value (cost) of Chinese exports on the back of a firming Yuan. The demand boosted exports and a stronger Yuan saw the country recording a trade surplus.
In subsequent second and third quarter of 2020, China achieved a 3.2% and 4.9% growth which altogether brought the annual average to an unexpected growth of 2.3%. despite the growth, looked at on a 40 year scale, the 2020 growth was least achieved by the country in 45 years.
The unexpected strong eeconomic rebound is attributed to Chinese government’s steep stimulus for industrial production which saw factory output growing by an average of 6.5% in the second half of 2020. At this point most of the developed world was in tighter lockdowns.
Juxtaposing, the World Bank predicted a -3,6% United States economic contraction and a -7,4% fall in the GDP of the overall GDP of the European Union while advanced economies as a whole are expected to have contracted by -5.4% in 2020.
The World Bank is even bullish on China’s economic outlook, which it sees growing by 7,9% in 2021, a prediction which may however be clouded by a new wave of COVID-19 infections stimulated by new variants.
The World bank projects a 2.9% growth for Zimbabwe’s economy in 2021 which is very wide off compared to Zimbabwe government’s own 7.4% projection. Equity Axis’ analysts predict that the economy will post a positive growth for 2021, curtailing a back to back recession between 2019 and 2020 but opine that the growth with be very fragile and in the region of 2.5%
Equity Axis News.