Bleak picture for China in Q1, but recovery seen for rest of year

KUALA LUMPUR (Bernama) – China’s gross domestic product (GDP), which is expected to grow by 1.2 per cent in the first quarter (Q1) due to the COVID-19 outbreak hurting economic activities, will likely rebound for the rest of the year to bring the overall growth to between 4.6 per cent and 5.2 per cent for 2020, said Bloomberg Economics.

Washington-based chief economist Tom Orlik said the outbreak has severely affected China’s economy along with the rest of the world, considering the country’s significant role in the global economy.

“We are seeing a bleak picture for the first quarter and perhaps in the second quarter too; but we anticipate it to bounce back for the rest of the year with the reducing number of new COVID-19 cases,” he said in a live Web-based seminar on COVID-19 and the impacts on economic growth yesterday.

Orlik said the economy is getting back on its feet with more people starting to go to work and factories in China resuming activities.

He said Bloomberg Economics expects China’s 2020 GDP to grow by 5.2 per cent in the best case scenario if the recovery picked up, and 4.6 per cent if the recovery took longer than expected.

Prior to the outbreak, he expected China’s economy to thrive given the signing of the US-China phase one trade deal and grow by 5.9 per cent in the first quarter of 2020.