'Hong Kong's Economy Shrinks 1.2% Last Year Amid Protest Fallout... First Contraction in 10 Years'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Last year, Hong Kong's economic growth rate decreased by 1.2%, marking a contraction for the first time in 10 years, Bloomberg reported on the 3rd. The prolonged anti-government protests triggered by the 'Fugitive Offenders Ordinance (Extradition Bill)' and the ongoing US-China trade war have dealt a blow to Hong Kong's economy.

According to Bloomberg, the Hong Kong government announced that last year's Hong Kong Gross Domestic Product (GDP) growth rate was recorded at -1.2%. This is the first economic contraction in 10 years since the global financial crisis in 2009 (-2.7%). Bloomberg had initially expected the GDP growth rate to be -1.4%. The 2018 GDP growth rate was revised from 3.0% to 2.9%.

Hong Kong's GDP growth rate for the fourth quarter was recorded at -2.9% compared to the same period last year, the same figure as the third quarter. The first quarter of last year saw a 0.6% growth, and the second quarter 0.5%. Since the anti-government protests began in June last year, it is interpreted that Hong Kong's GDP was hit in the third and fourth quarters. As the protests intensified, the number of tourists visiting Hong Kong sharply declined, causing significant damage to the tourism, food service, and retail industries.

Recently, with the additional adverse factor of the novel coronavirus infection (Wuhan pneumonia), concerns have arisen that the economic difficulties will continue into this year. Paul Chan, Hong Kong's Financial Secretary, wrote on his blog the day before, stating, "The food service, retail, and tourism sectors will fall into a 'deep winter,'" forecasting economic damage due to the novel coronavirus.

This content was produced with the assistance of AI translation services.