Worldwide monetary hub’s economic system shrinks 1.4 p.c within the second quarter, after earlier 3.9 p.c decline.
Hong Kong has tipped again right into a technical recession, new authorities figures confirmed Monday, weighed down by mounting rates of interest, weakened international commerce and town’s continued adherence to strict coronavirus controls.
Following a year-on-year lower of three.9 p.c within the first quarter of 2022, town’s gross home product (GDP) once more reported a decline within the second quarter on Monday — however with a narrower margin of 1.4 p.c — in keeping with advance estimates launched by the Census and Statistics Division.
The downturn is reversing final 12 months’s restoration when the economic system loved a 6.3 p.c annual development after the slowdown in 2019 and 2020 when town was first upended by months of giant, typically violent pro-democracy protests, after which the pandemic.
The Hong Kong authorities stated the financial enchancment was smaller than anticipated attributable to weak efficiency in exterior commerce.
Official statistics launched final month confirmed the worth of whole exports of products within the second quarter decreased by 4.2 p.c in contrast with the previous quarter.
For the primary half of 2022, a visual commerce deficit of $206.1bn, equal to eight.2 p.c of the worth of imports of products, was recorded.
“Weakened international demand and continued disruptions to cross-boundary land cargo flows between the mainland and Hong Kong weighed closely on Hong Kong’s exports,” the federal government stated Monday.
Financial coverage tightening by main central banks around the globe is anticipated to dampen international financial development considerably, whereas quarantine-free journey between Hong Kong and mainland China is but to have a transparent timetable underneath Beijing’s strict adherence to its zero COVID-19 coverage.
The monetary hub’s new chief John Lee stated his authorities would quickly announce additional shortening of necessary lodge quarantine for abroad arrivals, in keeping with an interview with the Hong Kong Financial Journal printed on Monday.
“Connecting with the world and with the mainland, we will do each and they aren’t contradictory,” Lee instructed the newspaper.
“I perceive that considered one of Hong Kong’s competitiveness lies in its worldwide connections.”
In following China’s zero COVID-19 coverage, Hong Kong has been largely reduce off from the remainder of the world for greater than two years.
It nonetheless has a number of the world’s strictest restrictions, together with a week-long quarantine for arrivals and a ban on group gatherings with greater than 4 folks.
Native media just lately reported that the federal government was mulling resuming quarantine-free journey for abroad arrivals in November, when town is hoping to resuscitate its worldwide picture with a finance summit and the Hong Kong Rugby Sevens.