By Gina Lee

Investing.com –China’s economy grew slower in 2021, potentially impacted by a property market slump. The slower growth also prompted the People’s Bank of China (PBOC) to cut interest rates on policy loans.

The fourth quarter was shown to have a 4.9% growth rate according to data released earlier today. Investing.com had forecast a growth rate of 3.6%, but the actual growth was 4.9% in the fourth quarter.

According to. Investing.com had forecasted a rise of 1.1%, and 0.2% in the third-quarter.

The world’s second-largest economy is facing headwinds in 2022 as outbreaks involving the omicron COVID-19 variant continue to pop up throughout the country. The economy slowed down due to electricity shortages and default in the property sector.

“Growth will continue to be weighed down by the property sector and of course, the zero-Covid policy that China is going to continue with,” Oxford Economics lead Asia economist Sian Fenner told Bloomberg.

Meanwhile, in December compared to a growth of 3.6% in forecasts prepared by Investing.com and November‘s growth of 3.8%.

December saw an improvement in industrial production, however it will slow down in January due to restrictions still being in place in several cities before the Lunar New Year holiday. This could also be caused by production restrictions in China on heavy industries ahead of Beijing Winter Olympic Games.

Comparing to a predicted growth of 3.7% by Investing.com in December and a record 3.9% in November, December saw a decrease in consumer spending. Consumer spending fell in December as the government tightened measures in several parts of the country, including the cities of Xi’an and Tianjin.

“Retail sales numbers are still quite telling that the zero-Covid policy is still wearing on consumers, and we haven’t seen the recovery that we’ve been seeing in the industrial sector,” said Oxford Economics’ Fenner.

While the November reading was 5.0%,

The property market collapse and COVID-19-related outbreaks have impacted economic growth. This is the first rate cut since April 2020. It also reduced the rate of the 7-day reverse repurchase agreement to 2.1%, from 2.2%.