Hong Kong (People's Daily) – Hong Kong’s economy is expected to shrink between 6% and 8% this year, as the COVID-19 pandemic continues to deal a heavy blow to global and local economic activity.
According to the official figures announced this Friday, the government downgraded its annual Gross Domestic Product (GDP) forecast for the second time this year, from the 4% to 7% contraction predicted in late April, when the Financial Secretary Chan Mo-po warned that the city’s economy was facing the worst recession ever.
Amid the looming uncertainties, Hong Kong’s real GDP fell by 9% year-on-year in the second quarter, following the record decline of 9.1% in the previous quarter. Short-term outlook on the local economy also appears bumpy and grim, considering the introduction of stricter rules on inbound travelers and social-distancing measures.
With the steepest ever year-on-year decline of 14.2% in private consumption expenditure, the outlook for domestic demand hinges on the local epidemic situation. Austere labor market conditions will also weigh heavily on private consumption in the coming weeks.
“The government will continue to roll out measures as necessary to maintain the vitality of the economy, and pave the way for a speedy recovery once the threat of the pandemic recedes,” said a city spokesman.