China’s GDP is headed for a 9 percent drop in first-quarter year-over-year growth as the coronavirus, which originated in Wuhan and spread across China before spreading around the globe, takes a toll on the country’s economy.
“The recovery in Chinese economic activity is likely to be constrained,” read the latest forecast report from economists at Goldman Sachs Group Inc., calling the economic data from the first two months of the year “strikingly weak.”
The report forecast a 9 percent contraction, down from a prediction of 2.5 percent growth for China. Industrial output was down 13.5 percent in January and February, retail sales dropped 20.5 percent, and fixed-asset investment sank 24.5 percent. Over the past two months, China’s manufacturing activity has dropped to a record low, according to data from the National Bureau of Statistics.
The U.S. investment bank’s March 17 report also adjusted predictions for real GDP growth over the whole year to 3 percent, down from 5.5 percent. Annual growth of about 6 percent would be “well out of reach,” the Goldman Sachs economists stated.
“While more forceful policy support could present upside risk, the recovery could be further delayed if the pandemic is not brought under control globally over the next few months,” they said.
The coronavirus outbreak, which has been declared a pandemic by the World Health Organization, has caused global stocks to shudder as investors panic about the economic damage the virus continues to cause from Asia to America. The U.S. stock market on Monday experienced its biggest drop since the virus began to spread: the Dow Jones Industrial Average dropped nearly 3,000 points in the largest single-day points loss in market history.