Coronavirus: China’s clobbered economy set to slow to 4.5 per cent in first quarter but will recover, poll says

Reuters poll predicts China’s annual economic growth in the first quarter of 2020 to slump to 4.5 per cent from 6.0 per cent in the previous quarter

Drop expected to drag down the full-year growth rate in 2020 to 5.5 per cent from 6.1 per cent in 2019, its weakest since at least 1990 when comparable records began

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The coronavirus was first detected in the Chinese city of Wuhan – a nerve centre in the global supply chain with a population of just under 11 million – and so far has claimed over 1,300 lives in China. Photo: EPA

Published: 11:30am, 14 Feb 2020Updated: 11:30am, 14 Feb 2020

The coronavirus-hit Chinese economy will grow at its slowest rate since the financial crisis in the current quarter, according to a Reuters poll of economists who said the downturn will be short-lived if the outbreak is contained.

A Reuters poll of 40 economists based in mainland China, Hong Kong, Singapore, as well as Europe and the United States, from February 7-13 predicted China’s annual economic growth in the first quarter of 2020 to slump to 4.5 per cent from 6.0 per cent in the previous quarter.

That drop was expected to drag down the full-year growth rate in 2020 to 5.5 per cent from 6.1 per cent in 2019, its weakest since at least 1990 when comparable records began.

However, economists were optimistic the economy would bounce back as soon as the second quarter, with growth then forecast to recover to a median 5.7 per cent, according to the poll.

Some service sector activity simply will be lost … people aren’t going to get their hair cut twice because they missed getting it cut in [the first quarter], or buy two coffees to make up for missed consumption

Freya Beamish

That figure was pushed higher by several optimistic forecasts from economists based in mainland China. The range was 2.9 per cent-6.5 per cent.

The coronavirus was first detected in the Chinese city of Wuhan – a nerve centre in the global supply chain with a population of just under 11 million – and so far has claimed over 1,300 lives in China. That outstrips fatalities from the severe acute respiratory syndrome (Sars) outbreak in 2002-03 which killed 774 people worldwide.

“Nobody knows the damage China’s virus containment efforts will have on growth, and we probably never will for sure, given the opacity of the statistics. We reckon true [gross domestic product] growth will fall below 2 per cent in [the first quarter], from 4.0 per cent in [the fourth quarter], which already was substantially lower than the official 6.0 per cent,” said Freya Beamish, chief Asia economist at Pantheon in London.