LONDON: The economic fallout from the deadly coronavirus (Covid-19) may cause a 6% contraction in China’s first-quarter gross domestic product, according to Pacific Investment Management Co.
The GDP contraction, which would be at a quarterly annualised rate, would push down year-on-year growth to 3%, compared with 6% expansion last year, Nicola Mai, a portfolio manager and head of sovereign credit research in Europe, and Tiffany Wilding, a US economist, wrote in a blog post published on Friday.
The impact of this will be felt around the globe as China accounts for a quarter of worldwide manufacturing activity.
“The longer quarantines depress Chinese economic activity, the more economic costs will rise, ” Mai and Wilding wrote. “It’s both a supply and demand shock. For most countries, there will be a direct hit as exports to China slow.” — Bloomberg
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