China's economy shrinks 2.6% after being impacted by virus shutdowns

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China's lockdowns imposed during the coronavirus pandemic took a major toll on the country's growth.

Second quarter and annual growth slowed drastically showing the impact on industrial production and consumer spending.

Gross domestic product fell 2.6% in the second quarter from the previous quarter, official data showed on Friday.

That compares with expectations for a 1.5% decline and a revised 1.4% gain in the previous quarter.

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FILE – A worker operates a machine for knitting socks in a factory in Funan county in central China’s Anhui province. China’s economic growth plunged to 0.4% over a year earlier in the latest quarter, officials announced Friday. (Chinatopix via AP, File / AP Newsroom)

On a year-on-year basis, GDP in the April-June quarter grew a tepid 0.4%, missing forecast of a 1.0% gain, according to a Reuters poll of analysts.

For the first half of the year, GDP grew 2.5%.

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Major cities went into full or partial lockdowns in March and April, including Shanghai.

Shoppers wearing face masks wait to pay for their groceries at a supermarket in Wuhan in central China’s Hubei province. ( Chinatopix via AP / AP Newsroom)

Data for June showed a rebound as industrial output grew 3.9% from a year earlier, but still short of expectations.

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A man lowers his mask to drink from a cup as he walks near a mall, Wednesday, July 13, 2022, in Beijing.  ((AP Photo/Ng Han Guan) / AP Newsroom)

A Reuters poll forecast China's growth to slow to 4.0% in 2022, far below the official growth target of around 5.5%.

Reuters contributed to this report.

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