BEIJING, (Reuters) – The slowdown in Shanghai’s economy, China’s largest city, was caused by low industrial output and lower retail sales. These were exacerbated by the worst COVID epidemic in China.

According to the local statistics bureau, Shanghai’s GDP (gross domestic product) increased 3.1% during the first quarter of 2018 compared with a year ago. This is significantly lower than the 4.8% national GDP growth announced earlier. Shanghai’s 2021 GDP will rise 8.1%.

The city’s statistics bureau stated in a statement that while January-February was stable in terms of economic activity, March’s COVID outbreak had a significant impact in the first quarter. “The city’s economy was stabilized in February and February but the decline in the second quarter resulted in stability,” it said.

Shanghai began reporting COVID-related cases early in March. In response to the outbreak, authorities declared an emergency lockdown for the city’s 25 million inhabitants in early April.

It is expected that the economic slowdown in Shanghai, where GDP data was not available for the fourth quarter 2021, will have intensified in April. When the coronavirus emerged, its GDP dropped 6.7% from January to March 2020.

According to a Shanghai official, the March output of Shanghai’s industrial sector fell 7.5% in April after strict lockdown measures stopped some production.

The Saturday data revealed that industrial production increased 4.8% between January and March compared to a year ago.

Shanghai’s retail sales in its first quarter, which is a crucial indicator of consumption, dropped 3.8% year on year. This was a sharp contrast to the 3.7% growth experienced over the previous two months.

Retail sales plunged 18.9% in March.

The city saw 1.8% increase in consumer prices in the first quarter compared to the previous year. Prices in January and February were up 1.6% year over year, while prices in March accelerated to 2.2%.

Shanghai residents were complaining about their food and other basic necessities during the lockdown. Some said that prices for vegetables have risen by 5-10 times since the outbreak.

Also, job growth slowed down in Shanghai, which reported 192 600 new jobs for the first quarter. This was a 26200 decrease from the year before.