Hong Kong’s economy contracted 1.4% in the second quarter from the same period last year, as government data showed on Monday as exports and investment continued to languish and COVID-19 weighed on broader economic activity. The drop was worse than DBS’ forecast of a 0.6% drop and his 0.5% drop observed by Standard Chartered. The city’s economy contracted a revised 3.9% in the first quarter.
State measures, including consumer voucher schemes, should have a supportive effect, it said. On a quarterly basis, the economy for the April-June period seasonally adjusted he grew by 0.9%, while the revised version for the previous quarter saw him contracting by 2.9%. Hong Kong’s borders have been largely closed since early 2020, and the city largely mirrors mainland China, pursuing a “dynamic zero COVID” strategy aimed at containing the outbreak.
“The deteriorating global economic outlook will continue to weigh on Hong Kong’s export performance for the rest of the year,” the city government said in a statement, adding that foreign trade could be pushed back once COVID travel restrictions are lifted. could be mitigated somewhat, he added. The border with the mainland will be relaxed. “Domestic economic activity is likely to pick up further this year, but the extent will depend on how the epidemic in the region evolves and the impact of tightening financial conditions on consumers’ purchasing power and sentiment,” the government said will be done,” he said.
Although precautions aren’t as stringent as on the mainland, the global financial hub retains some of the world’s narrowest curbs. Gary Ng, senior economist at Natixis Corporate and Investment Bank, said: “The pace of opening up remains slow and the coronavirus zero policy remains a key uncertainty for the Hong Kong economy in the near term. Let’s go,” he said “Current border control adjustments will not be enough to get the economy back on track,” Ng said.
Last week, Finance Minister Paul Chan said Hong Kong may need to further cut its annual economic growth forecast for the second time in three months in late August to include more external risks to the economy. Hong Kong should do well in the second half of the year the government in May lowered its real gross domestic product forecast for 2022 to 1%-2% from 2%-3.5%, given the worsening export outlook. “Of course, if international borders can reopen in the fourth quarter, it will have a positive impact on the overall economy and the atmosphere,” said Samuel Tse, an economist at DBS Bank.
- Hong Kong’s Q2 GDP declines 1.4% year-on-year, with recovery expected to be gradual
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