beijing in just about a week several investment banks have cut their china growth forecasts as covid lockdowns drag on in the economic hub of shanghai the new median forecast among nine financial firms tracked by cnbc predicted 45 china gdp growth for the full year thats well below the official government target for a 55 increase at the low end of predictions was nomura with a forecast of 39 down from 43 previously the stringently enforced zerocovid strategy causes a big supply shock to the overall economy especially to cities under full and partial lockdowns the japanese investment banks chief china economist ting lu said in a report on wednesday this supply shock may further weaken demand for homes durable goods and capital goods due to falling income and rising uncertainty he said since march mainland china has battled its worst covid outbreak since early 2020 shanghai home to the worlds busiest port has been one of the hardesthit regions a citywide twopart lockdown that began about a month ago has dragged on with no clear end in sight a major business district in beijing the national capital began three days of mass testing on monday and closed nonessential businesses in one area to control a spike in cases over the weekend among nine financial firms ubs cut its china gdp growth target the most down by 08 percentage points to 42 based on intensified downward pressure on the economy despite expectations for more policy support economist wang tao said in an april 18 report her team does not expect beijing to do whatever it takes to achieve the official 55 target since it was set before the latest wave of covid and the russiaukraine war we also do not believe that economic impact of covid policy alone will change the governments covid policy shift soon as minimizing covid cases and death will likely remain the top priority wang said as of tuesday morning shanghai had recorded more than 150 covidrelated deaths bank of americas china economist helen qiao made the secondlargest cut down by 06 percentage points to 48 covid19 lockdowns and restrictions imposed in shanghai and neighboring cities are not only hitting local demand but also causing logistic breakdowns and widespread supplychain disruptions within and outside of the area the bank said in an april 19 report in our view even if such control measures will ultimately be rolled back and economic activities will gradually normalize by midyear a heavy toll on growth already seems inevitable the report said allianz trades forecast reduction marked the second cut in just a few months on wednesday the firm lowered its gdp forecast to 46 down from 49 which itself was a revision from the 52 estimate set around the start of the year the first downgrade came after russia invaded ukraine in late february and the second downgrade assumes the shanghai lockdown lasts for a month before a return closer to prepandemic levels in may said françoise huang senior economist at allianz trade if the lockdown in shanghai lasts for two months and other large cities are affected she expects chinas gdp would only grow by 38 this year last week the international monetary fund also lowered its china gdp forecast for the second time this year the new estimate is for 44 growth down from a cut in january to 48 versus the imfs expectations in october for 56 growth in 2022 china reported on april 18 that firstquarter gdp grew by a greaterthanexpected 48 with industrial production and fixed asset investment also topping forecasts but retail sales contracted by a morethanexpected 35 later that day jpmorgan cut its forecast for fullyear gdp to 46 down from 49 previously the bulk of the downgrade came from reduced expectations for consumption growth with that for exports unchanged and investment trimmed by 01 percentage points it should not be surprising the omicron drag on economic activity will be larger in april than in march said the banks emerging markets asia economic and policy research team they estimated parts of china accounting for about 25 of national gdp were in full or partial lockdown as of early april also on april 18 barclays trimmed its fullyear gdp forecast to 43 down from 45 on expectations covid disruptions will last for a while morgan stanley had already cut its forecast back on march 31 to 46 from 51 previously economist robin xing and his team said china would not likely end its zerocovid policy until after a scheduled political reshuffle in the fall this means that sporadic lockdowns across the nation in the coming two quarters would constrain consumption even as production would be sheltered by closed loop management systems the report said