Shanghai GDP forecast for Q2

Economic effects of the latest Omicron revival will mainly be seen in the second quarter of the year, with an expected GDP growth of 2.1 percent. To combat the effects of the revival, fiscal and monetary policies will need to be accelerated.

However, the COVID-19 outbreaks bring new challenges to an economy that has been on track to recover in the first two months of the year. It affects not only services but also manufacturing, noting that the disruption to supply chains in the manufacturing center of the Yangtze River Delta region adds to pressure on employment and slows the recovery of consumption.

According to a report issued in May 2022 by Shanghai Securities News, a leading financial newspaper of Xinhua Agency, over 92 percent of the 667 listed companies surveyed have been affected by the Omicron outbreak, of which 37.18 percent said the impact is "heavy."

Domestic economic activity will record a remarkable improvement in the second half of the year, as macroeconomic policies will be implemented in regions less affected by the latest outbreak to boost economic activity.

Efforts should be made by the authorities to remove any obstructions to the smooth flow of industrial and supply chains and promote the resumption of production and business with a variety of measures, such as effectively controlling the virus and expanding vaccination.

By sticking to the principle that is housing for living in, not for speculation, local governments should appropriately list restrictions to support stringent needs.

More favorable fiscal and monetary policies need to be implemented quickly in order to lessen the spillover effect caused by the US tightening its monetary policies and imported inflation pressure.

GDP in China's first quarter of 2022 increased by 4.8 percent over the same quarter last year to 27,02 trillion yuan ($4.03 trillion), quickening from a 4 percent rise in the fourth quarter last year.