The economic impact of the latest Omicron resurgence will mainly appear in the second quarter of the year, with GDP growth rate forecast to be around 2.1 percent, a former central bank official said on Monday, calling for accelerated implementation of supportive fiscal policies and a wide array of monetary policies to bolster the recovery of economic and social activities.

“The Chinese economy has run better than expected in the first two months of the year, but the COVID-19 flare-ups bring new challenges for an economy that has been on track to a recovery,” Sheng Songcheng, former director general of the Financial Survey and Statistics Department at the People's Bank of China, said in an article published on Shanghai Securities News on Monday.

This round of outbreak affects not only services but also the manufacturing sector, he said, noting that the disruption in supply chains in the manufacturing center of the Yangtze River Delta region affects the normal operation of economic and social activities, adds pressure to employment and decelerates the recovery of consumption.

According to the newspaper, about 92 percent of the 667 listed companies surveyed said that they have been affected by the Omicron outbreak, of which 37.18 percent said the impact is “heavy.”

However, Sheng noted that domestic economy will record remarkable improvement in the second half of the year, as macro-economic policies will be timely implemented in regions less affected by the latest outbreak to fire up economic activities.

Sheng advised the authorities to remove impediments to the smooth flow of industrial and supply chains as soon as possible, and promote resumption of production and businesses with a variety of measures like effectively putting the virus under control and expanding vaccination.

By sticking to the principle that is housing for living in, not for speculation, Sheng said that local governments should appropriately list restrictions to support stringent needs.

The implementation of positive fiscal policies should quicken and monetary policies should be adopted by considering internal and external situations to ease the spillover effect of the US tightening monetary policies and imported inflation pressure, according to Sheng.

China's economy maintained a steady recovery over the first quarter this year, with GDP growing 4.8 percent year-on-year to 27.02 trillion yuan ($4.03 trillion) in the first quarter of 2022, quickening from a 4-percent increase in the fourth quarter last year.

A meeting of the Political Bureau of the Communist Party of China Central Committee on April 29 confirmed that the established policies will be swiftly implemented, including tax refunds and reductions, fee cuts and a range of monetary policy tools. 

Moreover, additional goal-oriented policies will be designed and deployed in a timely manner and given sufficient leeway.

Global Times