China adds billions to its 2021 GDP estimate, but its economy is facing a big test this year

Hong Kong
CNN
 — 

China’s gross domestic product (GDP) for 2021 was over half a trillion yuan more than initially calculated, official data revealed Tuesday. The update comes at a time the world’s second-largest economy faces severe strain from an unprecedented wave of Covid infections sweeping the country.

The new data from China’s National Bureau of Statistics (NBS) shows the nation’s economy grew 8.4% in 2021 from a year earlier, higher than the 8.1% initially reported.

Per the revised figures, China’s GDP reached 114.92 trillion yuan ($16.52 trillion) last year, up 556.7 billion yuan ($80 billion) from the previous estimate. The addition is equivalent to Bulgaria’s entire GDP in 2021.

Revisions to initial estimates of GDP are common in many economies, mainly because of the large amount of information used in data construction. The NBS said Tuesday its biggest upward revision was in the services sector.

The change comes as Covid infections hit factories and the consumer market following China’s recent pivot from its zero-Covid strategy that had long choked the economy.

The government previously set this year’s growth target at about 5.5%, but that is likely to be missed as the economy has been hammered by months of lockdowns and a slumping housing market.

Economists are generally expecting growth to fall between 2.8% and 3.2% this year, one of the lowest levels since 1976, when former leader Mao Zedong’s death ended a decade of social and economic tumult.