A serious economic blow hit the Chinese economy in the wake of the Coruna outbreak and expectations to reduce GDP growth during the first quarter to less than 6% if China fails to contain the spread of the virus until next March, according to analysts.
They stressed that the virus is the most serious blow to domestic consumption and tourism-related sectors across the country, given the weight that consumption has gained in the Chinese economy.
Given the outbreak of the virus coinciding with the celebration of the Chinese Lunar New Year, during which consumers were expected to spend a lot of money, its echoes on the Chinese economy would be great, according to Business Insider.
The spread of the Corona virus isolated the city of Wuhan, which is an important industrial center in China, contributing about 4% of the country's GDP.
Isolation of the region may lead to a slowdown in industrial production, which recently returned to 6.6% last December, from 6.2% in the previous month.
The spread of this virus may force officials in executive positions to ease credit conditions in all areas, and not only for small and medium-sized companies and private enterprises.
Analysts added that reducing the requirements of Chinese banks' reserves or reducing the interest rate is a possibility, but easing the credit may increase the size of the Chinese debt bubble and open the door to more speculation in the real estate market.
China said on Monday that the impact of the new Coruna virus epidemic will be temporary on the Chinese economy, and that the good economic foundations for long-term growth in the country have not changed.
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