UBS, JPMorgan Cut China 2022 Growth Forecasts on Covid Zero

(Bloomberg) — UBS Group AG and JPMorgan Chase & Co. downgraded their forecasts for China’s economic growth this year after activity in April was crushed by Covid-related restrictions, creating an even tougher uphill battle for the world’s second-largest economy.

UBS on Tuesday cut its year-on-year gross domestic product growth forecast to 3% from 4.2%, citing the impact of “zero Covid.” While the economy will likely rebound in the third and fourth quarters as the government refines its restrictions and reduces disruptions to transport and supply chains, that easing likely won’t be as rapid as it was in 2020 given the nature of the omicron variant, the UBS economists wrote.