Hong Kong crashes into recession as protests hit economy – “It’s completely driven by social events, and this is something the government needs to consider”
By Eric Lam and Enda Curran
31 October 2019
(Bloomberg) – Hong Kong’s economy contracted sharply in the third quarter as it entered a recession, exceeding economists’ worst estimates of the damage from nearly five months of protests.
Third-quarter gross domestic product retreated 3.2% from the previous three months, after a 0.4% contraction in the second quarter. That’s the worst slump since 2009, in the aftermath of the global financial crisis. Two consecutive periods of negative growth mean Hong Kong has fallen into a technical recession.
The economic debate now is focused on how long the downturn will last, if recent glimmers of stabilization point to a bottom, and if the U.S.-China trade war and the demonstrations have done lasting damage. Financial Secretary Paul Chan said this week that a full-year economic contraction is “very likely.”
“It’s completely driven by social events, and this is something the government needs to consider,” said Raymond Yeung, chief Greater China economist with Australia & New Zealand Banking Group Ltd. “It’s obviously comparable to the global financial crisis. We have a very similar situation that we don’t know when it’s going to end.”
Further details from the release
- Compared to the same period a year earlier, GDP contracted 2.9% versus the median estimate of -0.3%.
- Hong Kong’s economy is “very likely to record a negative growth for 2019 as a whole”.
- The data are a preliminary assessment; revised 3Q GDP figures will be released on 15 November 2019. [more]
