China’s economy dropped by 6.8 percent in the first quarter of the year, the first time it has shrunk since the cultural revolution of 1976. This confirms the huge economic impact the coronavirus pandemic has had on one of the biggest economies in the world.
The National Bureau of Statistics released new data that confirmed the slump is worse than the predicted 6.0 percent reduction by Bloomberg. As per the NBS data, the economy was under huge pressure in the month of March as industrial & retail sectors and the fixed asset investment continued to shrink dramatically.
In the first quarter of the year, China has been shut due to the novel coronavirus pandemic that forced the country led by the Communist Party to put the nation under lockdown.
Major drop in China’s various sectors
In the month of March, the industrial production that is often a measure of manufacturing, mining, and utilities, fell by 1.1 percent. This is after it witnessed a collapse of 13.5 percent in January and February. Retail sales, a measurement of the consumption of the country, fell by 15.8 percent following a record drop of 20.5 percent in the first two months of the year, against the estimation of 10.0 percent. A gauge of expenditure, fixed asset investment was predicted to shrink by 15.1 percent by analysts. It fell by 16.1 percent in the first three months.
The surveyed jobless rate was 5.9 percent, a drop from the 6.2 percent in the first two months. This, however, doesn’t include the migrant workers who have lost jobs in thousands or have not returned to work yet because of the travel restrictions. Average incomes fell by 3.9 percent and rural people found their incomes to be 4.7 percent lesser than the usual.
The biggest stat is the decline of the gross domestic product (GDP). For far too long, the Communist party has promising its voters an economic growth and this is certainly a dent in that narrative. As per the report by the International Monetary Fund, the global economy is likely to shrink by 3 percent while China will grow at an estimated 1.2 percent in second place behind India with 1.9 percent.
Source: The South China Morning Post