The Wall Street bank lowered its 2022 forecast to a 5.1% gain for Gross Domestic Product -- down from 5.3% previously and below the Chinese leadership’s target of about 5.5%.

It previously saw GDP rising 0.6% this quarter compared with the previous three months.

Morgan Stanley made the changes after China placed the city of Shenzhen into lockdown for at least a week and forbade people from leaving Jilin -- the first time the government sealed off an entire province since early 2020.

Higher infrastructure spending and an easing of housing policies can be expected, but the larger issue remains finding a Covid exit strategy.