COVID-19 outbreak sees China’s economy dip for the first time in nearly 30 years
With COVID-19 grinding spending and production to halt, official data shows that China’s economy suffered a sharp decline of 6.8% in the first quarter of 2020. Although the data shows that this downturn is in line with other Asian markets, it heaps pressure on the chances of recovery with other countries considering a reduction in future Chinese imports.
The Chinese economy saw a 6% expansion in the last quarter of 2019, but Q1 2020 marks the first time China’s economy has shrunk since 1992 when official quarterly GDP records began. Investors weren’t fazed by these alarming figures, however, as the Shanghai Composite index was up 0.7% when trading closed on Friday. Hours before the data was released, Wuhan – the epicentre of the coronavirus outbreak – announced that they had revised their number of COVID-19 deaths by 1,290, an increase of 50%.
The Chinese government has begun to reopen factories and ease travel restrictions and the economic powerhouse is soon expected to announce another stimulus package to relieve the effects of the COVID-19 pandemic. On Tuesday, the IMF (International Monetary Fund) said they expect the world economy to shrink by at least 3% in 2020. This would be the steepest downturn since the Great Depression in the 1930s.