Coronavirus May Trigger China Officials To Cut 2020 Growth Target : Report

China may ultimately lower its GDP estimates, which had initially been targeting growth of about 6% this year after China’s economy grew just 6.1% in 2019—its lowest rate in almost three decades

Photo: unsplash.com/Macau Photo Agency

Topline: China may cut its economic growth expectations for 2020 as the deadly coronavirus outbreak intensifies and continues to take a toll on the global economy, Bloomberg first reported on Monday.

  • Chinese officials are weighing options to mitigate the fallout from the fast-spreading coronavirus on the country’s economy, including lowering its 2020 annual economic growth target, sources told Bloomberg.
  • China may ultimately lower its GDP estimates, which had initially been targeting growth of about 6% this year after China’s economy grew just 6.1% in 2019—its lowest rate in almost three decades.
  • The country’s growth target is usually first endorsed by top party officials then announced at an annual legislative gathering which is scheduled for March 5—though that process could be delayed as the virus continues to take a toll on business activity across China, according to Bloomberg.
  • Economists have warned of the coronavirus’ impact on China’s already slowing economy, which has had to cope with weak domestic demand, rising debt and fallout from the trade war with the U.S.
  • Bloomberg Economics forecasts that China’s GDP growth could sink to 4.5% in the first quarter of 2020, while JPMorgan analyst Haibin Zhu slashed his expectations for quarterly growth to 4.9% from 6.3%.
  • Among other measures to mitigate the economic damage of the coronavirus, Chinese officials are also considering selling more special government bonds and increasing the planned cap on the budget deficit-to-GDP ratio, sources told Bloomberg.

 

Crucial quote: “The coronavirus is different. It is big. It’s going to paralyze China. It’s going to cascade throughout the global economy,” Mohamed El-Erian, chief economic advisor for Allianz and ex-Pimco CEO, told CNBC in an interview on Monday. “Importantly, it cannot be countered by central bank policy.”

Key background: The Chinese stock market plunged on Monday—its first day of trading since the extended Lunar New Year holiday. The market sell-off came despite Chinese central efforts to ease the economic impact of the virus with a $173 billion liquidity package. Fears about the rising severity of the coronavirus, which is now more deadly than the 2002-2003 SARS outbreak, sent the benchmark Shanghai Composite index down nearly 8%—its worst day of trading since August 2015. The massive sell-off wiped out nearly $400 billion off of China’s stock market, and more than 80% of listed companies fell by the maximum daily volatility limit of 10%.

Crucial statistics: As of Monday, the coronavirus has infected more than 17,000 people and killed at least 361, according to China’s National Health Commission. The deadly and fast-spreading virus has easily surpassed the number of infected seen in 2003 during the SARS outbreak which killed some 800 people and infected 8,000. There are rising concerns over the disease’s impact on China’s slowing economy, not to mention what effect it could have on slowing global economic growth.

Big numbers: China's annual projected economic growth rate of 5.9% could be dragged down by 0.5% to 1%, according to estimates from the Economist Intelligence Unit, or by as much as 1.2%, according to S&P Global.

Forbes.com

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25 ноября родились
Канат Нуров
президент научно-образовательного фонда «Аспандау»
Нурлан Онжанов
начальник канцелярии президента РК
Куаныш Тазабеков
первый проректор университета «Туран», президент Казахстанской ассоциации маркетинга
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