China says its economy shrank by 6.8% in the first quarter as the country battled coronavirus

China reported Friday that its first-quarter GDP contracted by 6.8% in 2020 from a year ago as the world’s second-largest economy took a huge hit from the coronavirus outbreak, data from the National Bureau of Statistics of China showed. The contraction in the first quarter is the first decline since at least 1992, when official quarterly GDP records started, according to Reuters. China’s government figures are frequently doubted by analysts.

The urban unemployment rate in March was 5.9%, according to the government’s survey. That’s down from a record high of 6.2% in February, data from the statistics bureau showed. Employment is a national priority and is stable overall, but the pressure on jobs is still considerable due to canceled orders, Mao Shengyong, a spokesman for the National Bureau of Statistics, said Friday at a press conference, according to a CNBC translation of his Mandarin-language remarks.

However, business activity is still not back to normal, especially in the services industries, and the spread of the virus overseas has led to a drop in demand for China’s exports. Mao said that given the International Monetary Fund’s projections for the next two years, it’s likely that China’s economy can grow by more than 5% this year and next. He declined to share details on an annual economic growth target, which Beijing usually sets at a major annual meeting in early March. This year, the meeting has been postponed to an unspecified date due to the coronavirus.

A separate Reuters poll showed China’s GDP growth is expected to slow sharply to 2.5% in 2020 from 6.1% in 2019. The coronavirus disease, officially called Covid-19, emerged in late December in the Chinese city of Wuhan and has killed thousands of people in the country. While the spread of the virus has stalled domestically, the disease has turned into a global pandemic in recent weeks, killing more than 144,000 people. Concerns about the impact of the virus to major economies has roiled global financial markets with fears of a recession.

China says its economy shrank by 6.8% in the first quarter as the country battled coronavirus, CNBC, Apr 17