The second quarter of this year saw a dramatic decline in China's economy as a result of widespread coronavirus lockdowns that affected both consumers and enterprises.
The GDP decreased by 2.6 percent from the previous quarter in the three months ending in June.
Major Chinese cities, including the important financial and industrial hub Shanghai, were either completely or partially placed under lockdown at this time.
This occurs while the nation maintains its "zero-Covid" policy.
The world's second-largest economy grew by 0.4 percent on an annual basis in the April-June quarter, falling short of forecasts for a 1 percent increase.
Because of lockdowns, particularly in Shanghai, which had a significant negative impact on activity at the beginning of the quarter, the second quarter's GDP growth was the poorest since the pandemic began, according to Tommy Wu, principal economist, According to Oxford Economics, the BBC.
British luxury clothing company Burberry, which said in a corporate report on Friday that its sales in China had been severely impacted, was one casualty of this slowdown.
Due to consumers being compelled to stay at home, the firm suffered a 35 percent decline in its Chinese sales in the first quarter. The company did note that its performance in China has been "encouraging" since since outlets there reopened in June.
Official government statistics for the previous month confirmed this, displaying an increase in the nation's economic performance following the removal of various restrictions.
"Data for June were more encouraging, with activity increasing once the majority of the lockdowns were removed. Growth, however, was still hindered by the real estate collapse, according to Mr. Wu.
Jeff Halley, senior market analyst for Asia Pacific at trading platform Oanda, also saw some encouraging signs in the most recent economic statistics from China, according to the BBC.
Although the GDP was below expectations, the jobless rate dropped to 3.5 percent, and retail sales fared admirably, he noted.
Financial markets are probably going to focus on the retail statistics, which seem to indicate that the Chinese consumer is doing better than anticipated, said Mr. Halley.
However, given that the government is still adhering to its stringent zero-Covid policy in an effort to stop the coronavirus's spread, many economists do not anticipate a speedy economic rebound for China.
The once-booming real estate sector of the nation is currently in a severe downturn, and recent months have seen a steep decline in the forecast for the world economy.
GDP is a gauge of economic size. Economists and central banks regularly monitor the economy's expansion or contraction as one of the most crucial indicators of how well or poorly it is doing.
It aids companies in determining when to grow and hire more employees or spend less and reduce their workforces.
Governments utilise it to help them make choices about everything from spending to taxes. Along with inflation, it is a crucial indicator that central banks use to decide whether to raise or cut interest rates.