Hong Kong's economy suffers worst quarterly contraction in history

Elias Hubbard
May 5, 2020

"This was the largest decline on record since the reference period of the first quarter of 1974", the government said, referencing the year it began tracking comparable data.

Hong Kong's GDP decreased by 5.3 percent in real terms in January-March from the previous quarter on a seasonally adjusted quarter-to-quarter comparison basis, also the steepest on record, based on advance estimates of the Census and Statistics Department of the HKSAR government.

The outbreak has killed four of Hong Kong's 1,041 virus patients, and largely put a brake on protests, while crushing tourism and keeping shoppers off the streets, hitting two key contributors to gross domestic product (GDP).

Although the city is slowly reopening its borders with mainland China and allowing business activity to resume, the global pandemic and anti-government protests could continue acting as a drag on the economy.

The policy loosening came amid easing signs of the epidemic in Hong Kong where there have been no new local infections for 16 consecutive days.

It also needs to uphold its core value of the rule of law and restore unity of people with different political views and from all walks of life to get out of the current dilemma, it said. It also covers gyms, beauty parlours, and game centers.

The government revised its GDP forecasts for this year to a contraction of 4 per cent to 7 per cent, from a previous estimate ranging from a decline of 1.5 per cent decline to growth of 0.5 per cent.

The government's fiscal condition is better than that of the Asian financial crisis more than 20 years ago, Lam said, adding that the government has already announced about HK$290 billion ($37 billion) of relief measures.

More global economic damage from the virus and a resurgence of local unrest would both result in "major downside risks" to Hong Kong's economy, said Oxford Economics senior economist Tommy Wu.

Other reports by Click Lancashire

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