Worst three months in decades: China’s economy plunges almost 7% amid coronavirus battle

The world’s second largest economy, China, took a huge hit due to the Covid-19 outbreak, according to data from the National Bureau of Statistics. It showed a 6.8 percent drop in the first quarter of 2020 from a year earlier.

That is the first such contraction since Beijing began reporting its quarterly gross domestic product in 1992.

Data showed that industrial production declined 8.4 percent in Q1, though March only saw a drop of 1.1 percent. Retail sales crashed 19 percent in the first quarter. Sales of consumer goods dipped by 15.8 percent in March, while online sales of physical goods rose almost six percent. Fixed-asset investment nosedived 16.1 percent in the first three months of the year.

The government survey found that the urban unemployment rate in March was 5.9 percent, down from a record high of 6.2 percent in February.

Employment is a national priority and is stable overall, but the pressure on jobs is still considerable due to canceled orders, according to Mao Shengyong, a spokesman for the National Bureau of Statistics.

He said, as cited by CNBC, that China is facing tremendous pressure amid increasing uncertainties and instabilities from the coronavirus outbreak. Mao added that the country is also facing new difficulties and challenges in resuming work and production.

Nevertheless, the spokesman expects China’s economic growth to improve. He pointed out that data for March was better than that of the first two months of the year, and a continuation of that trend would likely result in better data for April and the second half of the year.

Citing the International Monetary Fund’s projections for the next two years, Mao said it’s likely that China’s economy can grow by more than five percent this year and next.

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