China’s economy has contracted for the first time since 1992.
The coronavirus pushed China’s economy into its first contraction in nearly 30 years during the first quarter. Gross Domestic Product (GDP) shrank 6.8% from a year ago, the worst performance since at least 1992 when official releases of quarterly GDP started.
China’s economy in the first quarter also missed the median forecast of economists, who expected a 6% drop. China’s economy hasn’t contracted on a full-year basis since the end of the Mao era in the 1970s.
Retail sales in the world’s most populous country fell 15.8% in March as consumers remained wary, while investment decreased 16.1% in the first three months of the year. A brighter sign was the smaller-than-expected contraction in March industrial production of 1.1% as factories returned to work amid easing of lockdowns.
Both retailing and factory output showed improvement from the nadir in the first two months, suggesting a stabilization in China’s economic activity. China’s markets held on to gains after the release of the economic data and ended slightly higher as investors had already anticipated the weak performance. The Shanghai Composite Index ended up 0.66% on Friday, while the Hang Seng Index climbed 1.56% in Hong Kong.
