China’s already grim economic outlook worsens as it has put 21% of its population under lockdown due to the resurgence of the Covid pandemic.

Such a bleak outlook is reflected in a new forecast by Nomura Securities.

In August, the Japanese brokerage firm lowered China’s economic growth forecast from 3.3% to 2.8%.

At that time, Nomura said that it was very concerned about the impact of China’s Zero-Covid policy on the real estate industry. However, it believes that Beijing will continue to adhere to such a pandemic prevention strategy until March 2023.

And now, just one month later, Nomura again downgraded China’s economic growth forecast.

According to CNBC, the brokerage expected China’s gross domestic product (GDP) to grow 2.7% this year, lower than the 2.8% estimate set last month.

Ting Lu, chief economist at Nomura Securities, and his team said in a note that about 12% of China’s GDP is now affected by COVID-19 lockdowns as of September 6th, up from 5.3% in the previous week.

The analysts from Nomura said that when they cut the growth forecasts on August 17th, they did not expect China’s growth to deteriorate at such a pace.

As reported by a Chinese-language news outlet, as of September 6th, 49 cities in China had imposed lockdown measures of different degrees. The measures affect about 21% of the Chinese population, up from about 11% in the previous week.

Earlier this year, several major investment banks repeatedly revised their forecasts for China’s economy, especially after the financial hub of Shanghai implemented the two-month lockdown.

Nomura often revised their forecasts before other financial institutions, and its forecasts are generally low.

In their forecasts in August, the U.S.-based investment bank Goldman Sachs cut China’s 2022 full-year GDP growth forecast to 3.0% from the previous 3.3%.

Goldman Sachs economists cited the Covid pandemic, the shrinking investment in the real estate sector, and the lack of power supply due to high temperatures and droughts for their forecast.

China’s economy grew only 2.5% in the first half of 2022.

Sign up to receive our latest news!

By submitting this form, I agree to the terms.