Hong Kong Sees GDP Contraction Near Low End of Forecast Band
Hong Kong’s economy has shown nascent signs of revival alongside recoveries across the region.
(Bloomberg) -- Hong Kong’s economy will probably contract 6.1% this year, close to the lower end of the government’s forecast range, amid signs the city is starting to emerge from a deep recession spurred by political protests and then the coronavirus outbreak.
The government’s latest projection, released in a statement Friday, compares with August’s forecast range of -6% to -8%. It also revised data for the third quarter, showing gross domestic product declined 3.5% from a year ago, slightly worse than an earlier estimate of -3.4%.
Hong Kong’s economy has shown nascent signs of revival alongside recoveries across the region as virus outbreaks are brought under control and China’s rebound drives demand. The city’s exports jumped the most in two years in September, with shipments to the mainland surging 17%.
“The Hong Kong economy has shown initial signs of bottoming out,” Financial Secretary Paul Chan said in a blog post on his website Nov. 1.
Compared with the previous quarter, GDP rose 2.8% in the third quarter, lower than a previous estimate of 3%. The quarterly expansion was the first since before the start of anti-government protests last year and followed five straight quarters of contraction.
The economy isn’t out of the woods yet, with unemployment and retail consumption remaining depressed. The resurgence in virus cases globally and trade tensions between the U.S. and China will continue to weigh on Hong Kong’s growth prospects.
“The fluid international political environment coupled with the unpredictable and austere global pandemic are taking heavy tolls on many economies,” Chan said in his blog post.
©2020 Bloomberg L.P.