Beijing: China’s economy contracted for the first time in decades as drastic measures to contain coronavirus brought activity to a standstill.
The GDP shrank 6.8 per cent in January-March quarter from the same period last year, according to National Bureau of Statistics.
It was the first negative growth reported by China since Beijing began logging quarterly data in the early 1990s.
The figure marks a drop from the world’s second largest economy’s six per cent expansion in fourth quarter of last year.However,it was slightly better than the 8.2 per cent contraction forecast by economists in an AFP poll.
Economists have long harboured doubts about the accuracy of Chinese data,however, suspecting the numbers are massaged for political reasons.
Analysts have warned of tougher times ahead, with key export markets for Chinese goods battered by COVID-19.
“We are facing pressure in prevention of imported epidemic infections,” NBS spokesman Mao Shengyong told a press conference.
Full-year GDP growth expectations have fallen to 1.7 per cent, according to AFP’s poll — the worst annual performance since 1976.
IMF has pegged China’s full-year expansion at 1.2 per cent but predicts a strong rebound to 9.2 percent in 2021.
It has also painted a grim picture of the pandemic’s global impact, forecasting the deepest economic contraction since the 1930s.
Data showed a 1.1 decline in industrial output for March, reflecting lingering damage from factory shutdowns.This happened though travel restrictions were progressively eased and businesses stirred back to life.
Retail sales plummeted 15.8 per cent last month as many consumers stayed home and avoided crowds.But the urban unemployment rate dropped slightly to 5.9 percent last month, after surging to 6.2 per cent in February.
China’s target of eradicating extreme poverty and building a “moderately prosperous society” by end of 2020 appears under threat.
“At least half a million firms were dissolved and more are likely to follow,” said economist Mark Williams.
Surveys pointed to more layoffs in March, and unemployment will likely remain higher in the coming months, he said.
Some analysts believe the worst has passed for China but still expects a slow recovery.
Williams said depressed demand in foreign markets could reduce Chinese exports by as much as half.
AFP
