China’s economy recorded the first contraction in decades in the first quarter as the novel coronavirus that causes COVID-19 shut down large parts of the world’s second-largest economy and dimmed the global outlook.
Gross domestic product shrank 6.8% in the first quarter from a year earlier, missing the consensus forecast of a 6% drop and logging the worst performance since at least 1992 when official releases of quarterly GDP started. Factory output fell 1.1% in March, retail sales slid 15.8% and investment decreased 16.1% in the first three months of the year.
Policymakers will nevertheless take encouragement from the marked improvement in industrial output, which had suffered a double-digit fall in the first two months. A key question for recovery prospects is the extent to which consumers regain confidence as the lockdowns are lifted.