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According to a median of 62 analysts surveyed by Reuters, China’s economy is likely to expand at the slowest annual pace in over four decades this year, in light of the coronavirus pandemic induced economic disruptions.

Key findings

“Growth in the world’s second-biggest economy for 2020 was forecast at 2.5%

This would mark the weakest clip since 1976, the final year of the decade-long Cultural Revolution that wrecked the economy.

That is a sharp easing from a 6.1% gain in 2019, and is below the 5.4% growth forecast in the March poll.

The survey also predicted China’s economy in the first quarter will contract by 6.5% year-on-year, for the first time since at least 1992 when the country first started issuing quarterly gross domestic product (GDP) data.

It also marks a reversal from 3.5% growth forecast in the last survey done in the previous month. 

Analysts expect the PBOC to deliver another 100 basis points (bps) in banks’ reserve retirement ratios (RRR), and lower the one-year LPR by 35 bps to 3.70% by the end of 2020.

The benchmark deposit rate is also likely to be cut to 1.25% from its current level of 1.50%.

China’s consumer price index (CPI) in 2020 will likely rise 3.3% from the previous year, quickening from a 2.9% rise in 2019.”