The Chinese economy will slowly recover from its first quarterly contraction since current records began, economists predicted in a Reuters poll, but they warned of a likely recession if conditions worsen again from the global coronavirus pandemic, reported Reuters.
The poll found China’s gross domestic product (GDP) was expected to grow just 1.3% in the current quarter on a year earlier, after contracting 6.8% in January-March.
Reflecting the heightened uncertainty, forecasts for second quarter GDP growth ranged from -5.0% to +5.0%, with economists based in mainland China providing all of the more optimistic predictions. The poll of more than 40 economists in mainland China and beyond was taken April 20-22.
“Although there is resumption of work, that doesn’t mean that the economy is going back to the pre-COVID-19 levels, it is way, way behind that,” said Iris Pang, Greater China economist at ING in Hong Kong. “As long as strict social distancing measures are in place, we think China will struggle to recover quickly. I also worry there will be a second round of infection from the western part of the world because they are now relaxing the lockdown before their cases subside. That’s why I forecast a recession.”