( Reuters) – China’s economy shrank 6.8%in January-March from a year earlier, main information revealed on Friday, the first such decrease since at least 1992 when quarterly gross domestic product (GDP) records started.
A street cleaner strolls by Beijing’s Central Business District during early morning heavy traffic as the spread of the new coronavirus illness (COVID-19) continues in China, April 17, 2020, REUTERS/Thomas Peter
The historic depression worldwide’s second-largest economy follows efforts to include the coronavirus, which initially emerged in China late last year, shut down factories, transport and shopping center.
KEY POINTS
Q1 GDP -6.8%y/y (f’ cast -6.5%, Q4 6.0%)
Q1 GDP -9.8%q/q (f’ cast -9.9%, Q4 1.5%)
March commercial output -1.1%y/y (f’ cast -7.3%, Jan-Feb -135%)
March retail sales -158%y/y (f’ cast -10%, Jan-Feb -205%)
Jan-March fixed property financial investment -161%y/y (f’ cast-151%, Jan-Feb -245%)
Jan-March home financial investment -7.7%y/y (Jan-Feb -163%)
COMMENTARY:
MASAAKI KANNO, CHIEF ECONOMIST, SONY FINANCIAL HOLDINGS, TOKYO
” It was already known that there would be a sharp contraction in the first quarter, so the point is what healing there will be from the April-June quarter.”
” Japan and the United States are likely to have large unfavorable gdp figures in April-June, so if China will recover, I believe it will become a source of want to the world economy. However the issue is that China’s external need will stay insufficient, so we can’t have hopes of enough development based only on domestic need.”
JULIAN EVANS-PRITCHARD, SENIOR CHINA FINANCIAL EXPERT, CAPITAL ECONOMICS
” GDP contracted in Q1 for the first time because China started publishing quarterly information in1992 The regular monthly information recommends that activity enhanced in March but remained weak even as efforts to contain COVID-19 were unwinded.
” The March data contributes to more comprehensive indications that China’s economy is past the worst. However the recovery will most likely continue to underwhelm. The high frequency signs we track suggest that, after a preliminary bounce as containment measures were eased, the healing in activity has actually because slowed to a crawl.
” One issue is that domestic need is being kept back by labour market strains: the unemployment rate remained elevated in March, and per capita incomes decreased outright in Q1. On the other hand, the double-digit decline in commercial sales for exports last month contributes to signs that external headwinds are heightening. China remains in for a drawn-out recovery.”
ATSUSHI TAKEDA, PRIMARY ECONOMIST, ITOCHU FINANCIAL RESEARCH INSTITUTE, TOKYO
” Retail and repaired property financial investment visited 20%in January and February, so the GDP wasn’t an unforeseen figure.”
” What’s next in focus is what the pace of recovery will remain in the April-June and July-September quarters. The United States, Europe and Japan’s economies will drop sharply in the 2nd quarter, so while I think domestic need will recover, exports are most likely to fall greatly and the power of the healing will be damaged.”
HUA CHANGCHUN, CHIEF ECONOMIC EXPERT, GUOTAI JUNAN SECURITIES, SHENZHEN, CHINA
” Q1 information show