The Chinese economy shrank 6.8 percent in the first quarter as lockdowns to contain the COVID-19 pandemic shuttered factories and businesses and plunged the world into recession.
It was the worst performance for the world's second-largest economy since Deng Xiaoping's market reforms in 1979, according to the Associated Press. Bloomberg reported it was the first contraction in China's economy in 28 years.
The Coronavirus outbreak first emerged in the Chinese city of Wuhan in December and has claimed over 145,000 lives around the world, forcing governments to follow Beijing's lead and impose crippling economic restrictions to prevent waves of patients from overwhelming hospitals.
The lockdowns would create the worst global recession since the Great Depression, the International Monetary Fund (IMF) said this week.
"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago," wrote IMF Chief Economist Gita Gopinath in the World Economic Outlook update released Tuesday. "The Great Lockdown, as one might call it, is projected to shrink global growth dramatically."
"As a result of the pandemic," the IMF wrote, "the global economy is projected to contract sharply by -3 percent in 2020, much worse than during the 2008-09 financial crisis."
Newsweek reached out to the Embassy of the People's Republic of China in the United States of America for comment.
Retail spending in China decreased by 19 percent in the first quarter of 2020. Many businesses deemed non-essential remain closed, throwing many residents out of work. With the country attempting to mitigate the spread of the virus, many visitors from other countries are prohibited from visiting China, causing the tourism industry to suffer.
If the coronavirus threat lessens in severity during the second half of 2020, as it is projected to, the global gross domestic product could still decline by 3 percent for the year.
In the U.S., the 2020 gross domestic product is projected by the IMF to shrink by nearly 6 percent. The European region of Germany, France, Italy and Spain could see an average 7.5 percent decline in GDP.
Financial firm Goldman Sachs said Wednesday that although the real financial effects of the coronavirus won't be fully known until the second quarter of 2020, there could be a bit of an economic upswing beginning in June.
"While the uncertainty is substantial," the company said in a March report, "we expect the lockdowns and social distancing to result in sharply new lower new infections over the next month, and our baseline is that slower virus spread and adaptation by businesses and individuals should set the stage for a gradual recovery in output starting in May/June."
During the first quarter of 2020, Goldman Sachs reported a drop of $2.60 in earnings per share compared with the first quarter of 2019. While earnings per share last year were $5.71, the first quarter of this year showed earnings per share of $3.11.
How the world recovers financially may depend on how quickly it can respond to the coronavirus pandemic with Gopinath writing "we face tremendous uncertainty around what comes next."
"Flattening the spread of COVID-19 using lockdowns allows health systems to cope with the disease, which then permits a resumption of economic activity," Gopinath said Tuesday. "In this sense, there is no trade-off between saving lives and saving livelihoods. Countries should continue to spend generously on their health systems, perform widespread testing, and refrain from trade restrictions on medical supplies. A global effort must ensure that when therapies and vaccines are developed both rich and poor nations alike have immediate access."
