Hong Kong has inevitably fallen into contraction in Q1 but confident in economic outlook: HK financial secretary
Global Times

Hong Kong File photo

Hong Kong. (File photo: GT)

Hong Kong's economy is on course to contract in the first quarter of 2022, breaking a four-quarter run of recovery, but confidence in the economy remains, said Paul Chan Mo-po, Hong Kong Special Administrative Region (HKSAR) Financial Secretary, on Sunday.

"I have absolute and unshakeable confidence in Hong Kong's economic outlook. Hong Kong's development over the past few decades has taught us that even in the face of storms and difficulties, we do not need to be discouraged by short-term obstacles," Chan wrote on the Financial Secretary's website.

China is developing steadily and the "one country, two systems" principle has been fully implemented. The central government has firmly supported HKSAR's stability, prosperity and development, said Chan.

"In this context, Hong Kong has strived to develop itself into an international financial, trade and shipping center, and made its contribution to China. Today, these conditions and needs have become even stronger and are the most solid foundation for Hong Kong's future development," Chan noted.

However, Chan also warned of the pandemic, international geopolitical tensions, rising inflation and China-US relations that have placed enormous social and economic pressure on Hong Kong.

Data from different sectors of Hong Kong's economy reflect how stressful the current situation is.

Retail sales are set to fall again in February, ending a 12-month streak of gains. The Hang Seng index has also fluctuated wildly over the past period, once falling 10 percent within two days.

The pandemic has taken a heavy toll on Hong Kong's economy, with the latest unemployment rate jumping 0.6 percentage points to 4.5 percent and is expected to rise further.

As the fifth wave of COVID-19 hit, the number of newly confirmed cases in a single day exceeded 70,000 in Hong Kong. The death toll currently has reached nearly 7,000.

"Even if the epidemic disrupts the pace of short-term development, it will eventually pass. In the face of the current severe epidemic situation in Hong Kong, we should carefully plan and deploy our work," said Chan.

As an international city, the gradual and orderly restoration of contact with the outside world while implementing the goals of "putting people's health and life first," "reaching dynamic zero-COVID" and resuming border trade with the Chinese mainland are also real problems that need to be actively addressed, according to Chan.

"We will surely prevail over the epidemic and promote full economic recovery," said Chan, describing the first quarter as "tumultuous."

The secretary said in February that the outbreak can be put under control in two to three months.