US, WASHINGTON (ORDO NEWS) — Chinese GDP in the first quarter of 2020 fell by 6.8% in annual terms – this is the first decline in the PRC economy since the publication of quarterly GDP data by the State Statistical Office (GSO) in 1992. At the same time, the decrease exceeded analysts’ expectations.
The consensus forecast of the experts envisaged a fall in Chinese GDP by 6.5%, according to Trading Economics. In the fourth quarter of 2019, the PRC economy grew by 6% in annual terms.
The sharp recession reflects the severe damage caused to the Chinese economy by the outbreak of coronavirus infection COVID-19 and restrictions imposed by the country’s authorities to curb its spread.
Now, the Chinese government needs to take measures to support the economy in the face of increased unemployment and social instability, trying to keep the debt burden and financial risks under control, experts say.
The fall in GDP in January-March compared to the fourth quarter in January-March amounted to 9.8%, while analysts expected a decrease of 9.9%. The decline in GDP in quarterly terms was also recorded for the first time. In October-December, the PRC economy grew by 1.5% compared to the previous quarter.
The sharp economic downturn in China suggests what other states will face in the context of the coronavirus pandemic, which has already led to the closure of borders, a halt in business activity and the severing of global supply chains, writes The Wall Street Journal.
Recent statistical data suggest that the Chinese economy began to recover in March after a sharp decline in the first two months of this year.
Thus, unemployment among the urban population, which reached a record 6.2% in February, fell slightly at the end of March – to 5.9%. Unemployment, however, is still high, given that in recent years this figure has been holding at around 5%.
The volume of industrial production in China in March decreased by 1.1% in annual terms after a collapse of 13.5% in January-February. The consensus forecast of the experts suggested a drop of 7.3%.
Production in the processing industry last month decreased by 1.8% after falling by 15.7% in January-February.
An increase of 4.2% was noted in the mining industry, an increase of 8.9% in the utilities sector, including electricity generation.
Meanwhile, the production of cars and auto components in March fell by 22.4%, industrial equipment – by 5.4%. Food production increased by 5.7%.
The rate of decline in retail sales in China in March slowed down to 15.8% (forecast – 10%) compared with a collapse of 20.5% in January-February. People are still afraid of crowded places, including shopping centers, restaurants and movie theaters, so it will take time to restore retail sales, economists say.
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