Abstract
The outbreak of Covid‐19 in China during the Spring Festival of 2020 has changed life as we knew it. To explore its impact on China's economy, we analyse the daily railway passenger volume data during the Spring Festival travel rush and establish two RegARMA models to predict GDP in the first quarter. The models forecast China might lose 4.8 trillion yuan in the first quarter of 2020 due to Covid‐19, an expected decrease of 20.69 percent (year‐on‐year drop 15.60 percent). However, comparing our forecast GDP without Covid‐19 (23.2 trillion yuan) with the real GDP (20.65 trillion yuan), there is a smaller drop of 2.55 trillion yuan, a gap of 12.35 percent. The reason for this overestimation is that some positive factors, including macro‐control policies, are neglected in these models. With the global spread of Covid‐19, China should adopt a policy of focusing on balancing both domestic and external affairs against the instability of the world economy.
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