China posts first GDP decline on record as coronavirus cripples economy

DAMPAK VIRUS CORONA - BEIJING. China's economy shrank for the first time since at least 1992 in the first quarter, as the coronavirus outbreak paralysed production and spending, raising pressure on authorities to do more to stop mounting job losses.

Gross domestic product (GDP) fell 6.8% in January-March year-on-year, official data showed on Friday, larger than the 6.5% decline forecast by analysts in a Reuters poll and reversing a 6% expansion in the fourth quarter of last year.

The contraction is also the first in the world's second-largest economy since at least 1992 when official quarterly GDP records started.

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While China has managed to get large parts of its economy up and running from a standstill in February, analysts say policymakers face an uphill battle to revive growth as the coronavirus pandemic ravages global demand.

Nomura expects Beijing to deliver a stimulus package in the near-term, which could be financed by the central bank through various channels.

"However, unlike previous easing cycles, when most of the new credit went to finance spending on infrastructure, property and consumer durable goods, this time we expect most of the new credit to be used on financial relief to help enterprises, banks and households survive the Covid-19 crisis," they said in a note.