Hong Kong Q3 GDP Growth Rate -4.5%... Worst Since COVID-19 Outbreak

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Hong Kong's third-quarter gross domestic product (GDP) growth rate recorded -4.5% year-on-year, marking three consecutive quarters of negative growth. This is the worst figure since the second quarter of 2020 during the COVID-19 pandemic.

According to the South China Morning Post (SCMP) on the 31st, the Hong Kong government announced that the third-quarter GDP growth rate was -4.5% year-on-year, significantly below the market forecast of -0.8%. This figure is the worst since the -9% recorded in the second quarter of 2020.

Previously, Hong Kong's economic growth rate was -1.3% in the second quarter and -3.9% in the first quarter. Considering that the market generally defines a recession as two or more consecutive quarters of negative growth, it is analyzed that Hong Kong has entered a full-fledged recession. The Hong Kong government cited "deterioration of the external environment and weakening domestic demand" as reasons for the worsening third-quarter economic growth rate.

Gary Ng, an analyst at investment bank Natixis, told Bloomberg News, "Hong Kong is facing a perfect storm of self-imposed zero-COVID policy, high interest rates, and weakened external demand," adding, "The further decline in third-quarter economic growth appears to be due to the slowdown in the real estate market."

Due to the Chinese government's strict adherence to the zero-COVID policy, the outflow of foreign talent has intensified, raising concerns about an economic recession. Although the hotel quarantine policy for arrivals, which had been in place for nearly three years, was abolished at the end of September, quarantine regulations remain, such as prohibiting arrivals from entering restaurants for three days, causing difficulties in attracting foreigners and expanding investment.

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