BEIJING (Reuters) – Profits at China’s industrial firms grew at a faster pace in March from a year earlier, despite the negative impact on the economy from COVID-19 outbreaks and the Ukraine war, official data showed on Wednesday.
Profits in March were up 12.2% on year ago levels, according to Reuters’ calculations based on data from the National Bureau of Statistics (NBS).
The pace of profit growth accelerated from the first two months of the year. Industrial profits in the combined January-February period were 5% higher than a year earlier.
For January-March, industrial firms’ profits were up 8.5% on a year before, down 3.8 percentage points compared with the last quarter in 2021, according to the NBS.
China’s gross domestic product expanded by 4.8% in the first quarter from a year earlier, beating analysts’ expectations, and quickened from 4.0% in the fourth quarter.
However, the world’s second-largest economy slowed in March as consumption, real estate and exports were hit hard by anti-COVID measures, sparking concerns of rising recession risks.
Exports, a major driver of the economy, were up 14.7% in March from a year earlier, slowing from a 16.3% gain in January-February.
Analysts warn of a worsening trade outlook in April, noting severe bottlenecks in factory operations, road transportation and port congestion as a result of restrictions ordered to counter the spread of COVID.
Shanghai, China’s most populous city and its financial hub, is enduring a lockdown that has lasted a month so far, in by later April Beijing was reporting dozens of COVID cases daily. On Monday, Beijing’s city government extended mandatory testing to cover a total of 20 million people.
Meanwhile, geopolitical risks, including Russia’s attack on Ukraine, have created persistent uncertainty over global supply chains and disrupted commodities markets, causing more problems for manufacturing.
Wang Yiming, a member of the Monetary Policy Committee of the People’s Bank of China, told an economic forum on Sunday that China should take steps to soften the economic impact of COVID-19 and boost annual economic growth back above 5%.
The industrial profit data covers firms with annual revenues of over 20 million yuan from their main operations.
(Reporting by Ellen Zhang and Ryan Woo; Editing by Himani Sarkar & Simon Cameron-Moore)
