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Hong Kong’s exports contracted for a ninth straight month in July, albeit at a slower pace than expected, as the city’s economy suffers under the U.S.-China trade war and the impact of months of anti-government protests.
Exports declined in July to HK$338.6 billion ($43.2 billion), down 5.7% from year-ago figures, according to a government release. That compares with economists’ estimate of an 8.2% decline. The measure had retreated 9% in June, its biggest decrease since February 2016, the data show.
Imports tumbled a worse-than-expected 8.7% to HK$370.8 billion, led by decreases from suppliers including Malaysia, Korea and Singapore, for a trade deficit of HK$32.2 billion. The of imports from the Chinese mainland decreased 4%.
“Exports growth turned out not as weak as expected in July but we do expect this to weaken again in upcoming months given the recent escalation of the U.S.-China trade tensions,” said Tommy Wu, a senior economist with Oxford Economics. “Imports growth would be really weak because of both slowing re-export activities, plus gloomy domestic outlook as retail sales and inbound tourism are going to be dragged by the ongoing political turmoil.”
Softening global economic growth and U.S.-China trade tensions were the primary contributors to the export weakness, a government spokesman said.
“Looking forward, in the face of the difficult external environment and the further escalation of U.S.-mainland trade tensions in September, Hong Kong’s near-term export performance should remain sluggish or may even weaken further,” he said in a statement.
Hong Kong’s economy is getting hit on multiple fronts as the city faces its worst political crisis in decades. Gross domestic product contracted more than originally estimated in the second quarter, and Hong Kong’s unemployment rate also ticked higher for the first time since 2017.
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