China's economy shrank in the March quarter for the first time since current records began almost three decades ago, as the coronavirus shut down factories and shopping malls and put millions out of work.
On a quarter-on-quarter basis, GDP fell 9.8 percent in the first three months of the year, the National Bureau of Statistics said, just off expectations for a 9.9 percent contraction, and compared with 1.5 percent growth in the previous quarter.
Statistics bureau spokesman Mao Shengyong told a press briefing after the data that China's economic performance in the second-quarter is expected to be much better than in the first.
However, weaker domestic consumption, which has been the biggest growth driver, remains a concern, as incomes slow and the rest of the world falls into recession.
Per capita disposable income, after adjusting for inflation, fell 3.9 percent from a year earlier in the first quarter, the data showed.
“We are hesitant to think that this is just a one quarter event, Q2 will also likely be lower than expectation,” said Ben Luk, senior multi asset strategist at State Street Global Markets in Hong Kong. “To offset weakness in external demand, we will see some policy support later this month or early May.”
Industrial output fell by a less-than-expected 1.1 percent in March from a year earlier. Highlighting the challenges in consumption, however, was a 15.8 percent fall in retail sales, which was larger than expected.