US, WASHINGTON (ORDO NEWS) — The Chinese economy contracted in the first quarter for the first time in three decades of calculating quarterly indicators, as the coronavirus epidemic paralyzed production and investment.
China’s GDP in January-March fell 6.8% year on year after growing 6% in the previous quarter, according to the National Bureau of Statistics. Analysts had expected a decline of 6.5%.
Official data on quarterly GDP began to be maintained in China in 1992, and during all this time the economy has not been contracted ever.
In quarterly terms, the Chinese economy fell 9.8% after growing 1.5% in October-December 2019.
“First quarter GDP data is still pretty much in line with expectations, reflecting the loss of economic suspension during general quarantine,” said Lu Zhengwei, chief economist at Industrial Bank.
“Further, the general lack of demand is a concern. “Domestic demand has not fully recovered, as consumption associated with social gatherings is still banned, while external demand is likely to clog as the pandemic spreads.”
A little consolation was data on a smaller-than-expected drop in industrial production in March, which may mean that the government’s efforts to support the economy since February have been working.
The volume of industrial production in China in March decreased by 1.1% in annual terms instead of the expected decline of 7.3%.
At the same time, retail sales in the country fell by 15.8% in March compared with the same month of the previous year. Analysts had expected a 10% reduction.
The Chinese economy in 2020 will grow by 2.5%, at the lowest pace for almost half a century, economists believe Reuters polled last week.
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