Monetary Policy Report - 2nd Quarter of 2021
The current economic background
As China's vaccination rate continues to rise, the government accelerates the normalization of economic activity, leading to a return of consumer confidence and encouraging investment. In the second quarter, the pace of its recovery slowed considerably as the country contended with surging commodity prices and supply chain disruptions. The economy still has been growing at a rate of 1.3% over the first quarter, corresponding to 7.9% in comparison to the same period last year, compared to an 18.3% year-on-year increase China registered in the first quarter — though that record-breaking figure largely reflected how much the economy slumped in early 2020, as the coronavirus pandemic was taking hold. One of the main reasons for the slowdown was the slowing growth in the service sector due to a Covid-19 outbreak in southern China and subsequent containment measures which curbed consumer and business activity. Exports remain the biggest driver of growth.