The fall of the Chinese economy turned out to be more serious than expected
China’s GDP in the first quarter of this year has fallen by 6.8% compared to the same period last year, the National Bureau of Statistics of the PRC reported. According to RBC, this is the first such fall since 1992. Then the government began to publicly release its quarterly GDP figures. The Morning China Post has published a suggestion that the last time the country’s GDP reached this level was in 1976 after the Cultural Revolution.
The sharp drop occurred after a 6% growth in the last quarter of 2019. Industrial indicators lost 1.1% in March compared to the same period in 2019. Retail turnover lost 15.8%. Fixed assets lost 16.1%. On the contrary, unemployment has improved. In February, it was 6.2%, in March — 5.9%.
The government had to enforce strict quarantine due to the spread of the coronavirus. The outbreak of the pandemic has blocked production and population spending. The decline of 8.3%, which was noted, turned out to be more serious than analysts predicted — 6.5%. The fall of the Chinese economy foreshows similar losses to other states.
Goldman Sachs economist Andrew Tilton said that the nature of this shock is significantly different from others that humanity has experienced. Perhaps something similar could have happened in 1976, when Mao Zedong died. The Chinese economy is gradually starting to recover, but growth will be slowed down by reduced purchasing power, as well as falling demand in other countries.