The 2019 Wuhan n-CoV outbreak may impact China’s economic growth, analysts’ forecasts. According to Pantheon Macroeconomics Chief Asia Economist Freya Beamish, China’s economy could grow by less than 2% year-over-year.
The rapid spread of the novel coronavirus that originated from Wuhan, a town in Hubei Province, China, has become a global emergency, as the World Hold Organization has characterized the outbreak. Killing more than 425 individuals and infecting more than 20,400 patients across the globe to territories as far as the United States, the Wuhan coronavirus outbreak has crippled most of China’s economy as travel restrictions were imposed to contain the spread of the virus.
Analysts believe that the rapid spread of the virus is a potential fallout for the world’s second-largest economy as businesses are starting to feel the impact from falling demand and the shutdown of vast swathes of the country, many of which serve as economic engine rooms.
Beamish, in an interview with CNBC, said that China could be facing a quarter-on-quarter contraction in GDP (gross domestic product) for the first quarter. The analyst expects this would happen once the effect of shutdowns due to the virus and an already slowing economy are factored into the estimates.
“The authorities are saying that there could be one percentage point shaved off year-over-year growth, so we get down to the 5% region — that is already a huge admission from the Chinese authorities, particularly in the year when they’ve got this long-term poverty reduction goal during which they need to meet that 6% growth rate, and (Chinese President) Xi Jinping is still talking about that,” Beamish said.
Amidst its reported growth of 6.1%, Beamish said that this level of growth from China is “extremely weak.”
“We are thinking in the region of 3.8% year-over-year, and again plugging in those numbers, we’re looking at year-over-year growth of probably less than 2%,” she said, adding that to see those numbers emerging from a Chinese GDP spreadsheet was “quite a shocker.”
