Elon Musk says China’s economy experiencing ‘recession of sorts’ due to poverty

China is experiencing a downturn similar to a recession driven by the housing market slump that has lasted for over a year, according to Tesla Inc.’s founder Elon Musk.

“China is experiencing a recession of sorts mostly in the property market,” said Musk, the electric carmaker’s chief executive officer, during a third-quarter earnings call Wednesday US time. He was responding to a question about recent order intake trends, particularly in China, where Tesla has a major factory.

For the latest headlines, follow our Google News channel online or via the app.

Europe, meanwhile, is facing a recession driven by energy shortages, while the US is in good shape, Musk said, adding that while the Federal Reserve is raising interest rates “more than they should,” he thinks they’ll “eventually realize that and bring them back down again.”

China’s economy almost stagnated in the second quarter as major cities were put under lockdown, including Shanghai. During that city’s months-long lockdown, factories -- including the Tesla plant -- were forced to suspend operations for several weeks.

Since then, China’s recovery has remained fragile as COVID-19 outbreaks and restrictions keep weighing on activity and demand. The nation’s property market slump has also dampened confidence and curbed demand for everything from commodities to loans.

Economists surveyed by Bloomberg forecast the economy to have recorded 3.3 percent growth in the third quarter. That data was due Tuesday, but the country’s statistics authority postponed its release -- an unusual move that came as the Communist Party’s twice-a-decade congress convenes.

Property investment through the first nine months of the year is estimated to have declined 7.5 percent from a year ago. Growth through a similar time period before the pandemic had surpassed 10 percent.

Read more:

Elon Musk ‘excited’ about $44 billion buyout of Twitter, but says he’s overpaying

Elon Musk’s politically charged tweets complicating diplomacy from Ukraine to Taiwan

Elon Musk sued by Twitter investor over ‘fraudulent’ buyout flip-flop