OECD GDP falls in the second quarter due to the collapse of China

The Chinese economy is faltering It could lead to the collapse of the rest of the advanced economies.

The drums of stagnation have been beating on the world stage for quite some time. The United States entered a technical recession in the second quarter of the year, after suffering two consecutive GDP contractions, and China also took a heavy hit.

Beijing’s zero-COVID strategy has led to severe shutdowns and shutdowns, and has had a strong impact on the economy, which suffered in the second quarter of this year. 2.6% shrinkage.

Now, the collapse of China has dragged the rest of the advanced economies down. Between April and June, G20 gross domestic product suffered a 0.4% drop from the previous quarter, after rising 0.5% in the first quarter, according to estimates published today. Organization for Economic Cooperation and Development.

The agency notes that this contraction contrasts with the OECD region, which includes more countries, where GDP growth was 0.4% in the same period.

“The slowdown in the G20 region in the second quarter of 2022 mainly reflects the strong contraction in China, where GDP fell 2.6% q-o-q, after rising 1.4% in the first quarter of 2022,” the report says. Organization for Economic Cooperation and Development.

The report adds that this downturn reversed the lockdowns put in place to contain the COVID-19 outbreak.

Meanwhile, the US economy saw a 0.4% drop in the first quarter, followed by another 0.2% drop in the second quarter. Analysts attribute these declines to the effect on activity of the historic hike in interest rates announced by the Federal Reserve.

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But China and the United States are not the only economies suffering. GDP also contracted in India (by 1.4%), South Africa (by 0.7%) and the United Kingdom (by 0.1%).

In India, the main reasons for the slowdown were lower government spending and net trade (exports minus imports), while in South Africa, the economic recovery in the past two quarters was undermined by severe flooding in a major industrial province.

Growth also slowed, but remained positive, in Saudi Arabia (2.2%), Indonesia (1.0%), Mexico (0.9%) and Germany (0.1%).

Despite the GDP contraction in the G20 as a whole, Australia, Brazil, Italy, Japan, Korea and Turkey posted stronger growth in the second quarter of 2022 than the previous quarter. Growth in Turkey (2.1% in the second quarter of 2022, compared to 0.7% in the first quarter of 2022) was supported by a marked increase in private consumption.

In France, GDP rose 0.5% in the second quarter of 2022 after a 0.2% contraction in the previous quarter, while growth in Canada remained stable at 0.8%.

For its part, Spain’s GDP growth reached 1.1% in the second quarter, one of the highest in the Eurozone (0.8%) thanks to the strong consolidation from the start of the tourism campaign.