The contraction is also the first in the world's second-largest economy since at least 1992 when official quarterly GDP records started.
While China has managed to get large parts of its economy up and running from a standstill in February, analysts say policymakers face an
uphill battle to revive growth as the coronavirus pandemic ravages
global demand.
Nomura expects Beijing to deliver a stimulus package in the near-term, which could be financed by the central bank through various
channels.
"However, unlike previous easing cycles, when most of the new credit went to finance spending on infrastructure, property and consumer
durable goods, this time we expect most of the new credit to be used on
financial relief to help enterprises, banks and households survive the
COVID-19 crisis," they said in a note.
On a quarter-on-quarter basis, GDP fell 9.8% in the first three months of the year, the National Bureau of Statistics said, just off
expectations for a 9.9% contraction, and compared with 1.5% growth in
the previous quarter.Separate data showed China's industrial output
falling by a less-than-expected 1.1% in March from a year earlier.
Retail sales fell 15.8% in the same period. Fixed asset investment
shrank 16.1% in January-March.
China's urban jobless rate was at 5.9% in March, down from 6.2% in February.
The pandemic has infected more than 2 million globally and killed more than 130,000. China, where the virus first emerged, has reported
more than 3,000 deaths although new infections have dropped
significantly from their peak.
Analysts expect nearly 30 million job losses this year due to stuttering work resumptions and plunging global demand, outpacing the
20-plus million layoffs during the 2008-09 financial crisis.Beijing has
pledged to take more steps to combat the impact of the pandemic, as
mounting job losses threaten social stability.
The central bank has already loosened monetary policy to help free up the flow of credit to the economy, but its easing so far has been
more measured than during the global financial crisis.
The government will also lean on fiscal stimulus to spur infrastructure investment and consumption, which could push the 2020
budget deficit to a record high.
For 2020, China's economic growth is set to stumble to its slowest annual pace in nearly half a century, a Reuters poll showed this week
