China industrial output contracts for first time in decades

Industrial production for January and February shrank 13.5 percent, the first contraction in around 30 years.

This was markedly worse than a Bloomberg poll of analysts which forecasted a 3 percent drop on-year.

Retail sales plummeted 20.5 percent on-year during the same period, after rising 8 percent in 2019. 

Analysts had expected a 4 percent fall.

Data in the first two months is released together to account for regular seasonal factors during the Lunar New Year holiday.

But this year, China's businesses and factories saw an unusually slow return to work after an extended Spring Festival break, as Beijing attempted to curb the rapid spread of the coronavirus. 

Consumers were urged to stay home and avoid gatherings.

The drop in industrial output marked a sharp reversal from 6.9 percent growth in December, and 5.7 percent growth for 2019 overall.

ING economist Iris Pang said it is the first contraction since January 1990, when industrial production shrank 21.1 percent.

Fixed-asset investment was down 24.5 percent on-year, a drop on the 5.4 percent rise seen last year.

The data, released by the National Bureau of Statistics (NBS) on Monday, was the latest in a series of economic indicators showing the extent of the epidemic's impact on China's economy.

China's exports plummeted in the first two months of this year, dropping 17.2 percent, and the country's trade surplus with the US sharply narrowed 40 percent.

The NBS said Monday that China's economic development in the first two months was affected by the outbreak of COVID-19, but reiterated officials' stance that the impact was "short-term and external".

"At present, the virus spread has been basically curbed and the outlook for epidemic prevention and control is getting positive," said NBS spokesman Mao Shengyong Monday.