COVID-19's Impact on China's Economy Based on Data of Spring Festival Travel Rush
14 Pages Posted: 17 Mar 2020
Date Written: March 15, 2020
The outbreak of COVID-19 in China during the Spring Festival of 2020 is an unprecedented event. Its impact has spread throughout the country and around the world. In order to explore the impact of the epidemic on China's economy, this paper starts with the analysis of the daily railway passenger volume data during the Spring Festival travel rush, and establishes three time series to model the railway passenger volume, GDP in the first quarter model, and GDP in the last three quarters respectively. The forecast results indicate that: (a) Affected by the epidemic, China’s economy will lose 4.8 trillion yuan in the first quarter of 2020, which is an expected decrease of 20.69% and a year-on-year drop of 15.60%; (b) China's expected GDP growth rate for the full year of 2020 will reduce from 6.50% to 1.72%. However, there are some positive factors not taken into account in these models, which means that the forecast results may be underestimated. With the global spread of the epidemic, the instability of the world economy will in turn impact China’s economy. In this regard, the Chinese government should adopt a policy of focusing on both domestic and external affairs.
Keywords: COVID-19, China’s GDP prediction, Spring Festival travel rush, Transportation data, RegARMA model
JEL Classification: C0, C1, C5, I1
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