Zhang Ming, an economist at the Chinese Academy of Social Sciences, said China’s annualized growth could slow to 5.0% in Q1 this year, or even lower, due to coronavirus outbreak. That’s sharply lower than original estimate of 6.0% annualized growth. While there could be recovery afterwards, full-year expansion could flow from 2019’s 6.1% to just 5.7%.
He estimated that the impact of the current coronavirus would be significantly higher than that of SARS back in 2003. Now, China’s economy is much more reliant on services and consumption. The outbreak has also hit sectors including transportation, tourism, catering and entertainment. It could also weigh on the employment market as unemployment rate could exceed 5.3% in the coming months.
In response, Zhang expected the government to step up policy support while PBoC could lower the reserve requirement ratios for banks and interest rates.