Macroeconomic & Geopolitical

More China Lockdowns May Bring More Slowdowns

April 2022 – 3 min read

China’s zero-COVID policy should be a significant headwind to growth, with its impact likely weighing more on consumption than production. Nevertheless, more logistical delays could disrupt manufacturing activity in the months ahead and add to global inflationary pressures.


more-lockdowns-china-chart1.jpgArrows indicate consensus forecast compared to the previous period. Local dates of release.

  • The advanced estimate of 1Q21 GDP is expected to show easing with the end of the Omicron wave.
  • We will watch the employment cost index—our and the Fed’s preferred measure of wage growth—given the tight labor market.
  • The PCE deflator is expected to accelerate on a year-ago basis in March.
  • Russia’s war in Ukraine will continue grabbing the world’s attention as a new wave of sanctions is imposed.
  • The EA CPI preliminary April print will show how the latest energy shock triggered by Russia’s invasion will reverberate through European sectors.
  • EA 1Q21 GDP is expected to remain positive, even if the first signs of weaknesses coming from Russia’s invasion appear.
Asia Pacific
  • Japan activity data could show the nascent impact of all remaining COVID restrictions, which were loosened on March 22.
  • Focus from the BOJ meeting will be on whether there is a policy shift given the recent notable weakening of the yen.
  • China PMIs for April will likely soften further given lockdowns.

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Bonnie David


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