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China's Virus-Hit Economy Set To Post First Decline Since at Least 1992

Reuters

   BEIJING - China's coronavirus crisis is expected to have tipped its
   economy into its first decline since at least 1992, data is set to show
   on Friday, raising pressure on authorities to prop up growth as
   mounting job losses threaten social stability.

   Beijing has succeeded in getting large parts of the economy up and
   running from a standstill in February, but analysts say policymakers
   face an uphill battle to revive growth as the coronavirus pandemic
   ravages demand at home and abroad.

   Analysts polled by Reuters expect gross domestic product (GDP) to have
   shrunk 6.5 percent in January-March from a year earlier. That would
   reverse a 6 percent expansion in the previous quarter and mark the
   first decline since at least 1992, when official quarterly gross
   domestic product (GDP) records started.

   China releases first-quarter GDP data at 0200 GMT on Friday, along with
   March factory output, retail sales and fixed-asset investment.

   Analysts at Nomura said they expected Beijing to deliver a stimulus
   package in the near-term, which could be financed by the central bank
   through various channels.

   "However, unlike previous easing cycles, when most of the new credit
   went to finance spending on infrastructure, property and consumer
   durable goods, this time we expect most of the new credit to be used on
   financial relief to help enterprises, banks and households survive the
   COVID-19 crisis," they said in a note.

   For 2020, analysts polled by Reuters expected China's economic growth
   to slow sharply to 2.5 percent from 6.1 percent in 2019, which would be
   the weakest clip since 1976, the final year of the decade-long Cultural
   Revolution that wrecked the economy.

   The pandemic has infected more than 2 million globally and killed more
   than 140,000. China, where the virus first emerged, has reported more
   than 3,300 deaths, although new infections have dropped significantly
   from their peak.

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