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Coronavirus could trim 1 percentage point from China GDP growth – Govt think tank

In a commentary published in the 21st Century Business Herald newspaper on Tuesday, Zeng Gang, Vice-Chair of the National Institute for Finance and Development, a Chinese government think tank, said that the coronavirus outbreak could trim the country’s full-year economic growth rate by as much as 1 percentage point in 2020.

Key Quotes:

The impact of this epidemic on the economy in the first quarter is expected to be comparable.

At present, according to different scenario assumptions, researchers expect the negative impact of the epidemic on full-year GDP growth to be in the range of 0.2% to 1%.

But in the short term, the epidemic's impact on economic activity cannot be ignored, especially with tertiary industries and small enterprises with tight cash flows facing greater pressures.

Difficulties for small companies could prompt a rise in bankruptcies and put upward pressure on the unemployment rate in the first quarter.

The employment situation is not optimistic. This will also pose a serious challenge to the macro policy goal of 'employment first'.

  • USD/CNH drops further below 6.9800 amid risk reset

 

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