Based on the recent analysis and market forecast, China's economic growth in the first quarter of this year will fall substantially. Will the growth rate fall below 4 percent? Do you need to carry out stimulus measures, such as, to cut interest rates, to reduce the required reserve ratio or increase the deficit-to-GDP ratio? Thank you.
Recently, there have been a slew of research studies, analyses and debates among economists, market institutions and government departments in regard to the future of China's economy. The People's Bank of China is also paying close attention to the operation of China's economy. We are also in the midst of our own research and forecasts. In our opinion, the epidemic's impact on our economy is temporary. Coinciding with the Chinese Lunar New Year holiday, the outbreak has had repercussions on the tertiary industry, including tourism, catering and entertainment, and due to the extended holiday, manufacturing and construction sites which delayed production had also been affected as well. We think the epidemic will impact the economy in the first quarter of this year, but our output can rebound once our economy's production potential is released after the 2019-nCov outbreak is controlled. In retrospect, the economic growth in the second quarter of 2003 was affected by SARS, but it rebounded in the third quarter as soon as the pandemic disappeared. Therefore, in our opinion, after the epidemic eases, China's economy will again return to stable growth. Consumption and investment which had been constrained or delayed will be restored and the economy will recover.
As I said, the Chinese economy has strong resilience and great potential. We have laid the foundation for its long-term and high-quality growth which can't be weakened by the outbreak of this epidemic, and there is still ample room for China's macro-control policy. In terms of monetary policy, China is one of the few economies among the world's major economies that still carry out normalized monetary policy, which offers the Chinese government sufficient tools to effectively deal with the impact of the epidemic. As for the specific policies you just asked about, the People's Bank of China is carefully analyzing and evaluating the impact of the outbreak to the Chinese economy and will make pragmatic policy responses. Thank you.
I agree with Mr. Pan that the outbreak of the novel coronavirus will bring some impact to the Chinese economy, but it won't change the basic trend of its long-term steady and sound growth. Under the guidance of the CPC Central Committee and the State Council, the Ministry of Finance and relevant departments have already introduced a series of tax and fee reduction policies.
Next, we will continue to implement and refine the relevant policies, and further consolidate and expand on our current results. According to the requirements of the "three guarantees," we will pay close attention to the tax changes of all industries, and resolve significant problems faced by enterprises that are affected by the epidemic in a timely manner. In so doing, we will be able to allow the tax and fee reductions to fully take effect. We believe that under the strong leadership of the CPC Central Committee and the State Council, together with the great efforts of all Chinese people, we will definitely resume normal production and life as soon as possible, as well as minimize the adverse impact of the epidemic. Thank you.