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29 Dec, 2019 14:01

Hong Kong economy will inevitably shrink further as protests show no sign of abating

Hong Kong economy will inevitably shrink further as protests show no sign of abating

Hong Kong's economy is on the path to face another contraction in the fourth quarter, the financial secretary has warned as raging protests continue to take a toll on the city.

“Judging from the situation in the past months, continued negative growth is unavoidable,” Financial Secretary Paul Chan Mo-po said on Sunday.

While the official economic results will be released only early next year, Chan could already cite some gloomy statistics. The city’s retail sales plunged 26 percent in October, while its once booming tourist sector lost 50 percent of vacationers during the Christmas holidays. Tourist numbers have been dramatically collapsing since the beginning of the unrest, with earlier reports saying that Hong Kong-based companies were deprived of more than 2.5 million visitors.

“It was the HK government's first loss in 15 years, making it less flexible to mobilize financial resources in the recession,” he said as cited by the Global Times.

In a separate statement, another top financial official, Hong Kong's Chief Secretary Matthew Cheung, said that the economy could post an annual 1.3 percent contraction this year for the first time in ten years, while the consequences of the protests from a macro aspect will be further evaluated. He also warned that next year might not be much easier, fraught with “tough tests and challenges.”

On the bright side, the city still has a chance for “rebirth” if the violence stops, according to Cheung. “The past six months have been tough for us, but we will soldier on,” he wrote.

Also on rt.com Hong Kong plunges into recession as months of violent protests take toll on economy

In October, China’s self-governing territory recognized that massive rallies, sparked in June by a now-withdrawn extradition bill, plunged it into recession after two successive quarters of contraction. Months of chaos are believed to have cost Hong Kong two percent of its GDP, and are feared to leave the budget in the next 2020-21 financial year in the red.

For more stories on economy & finance visit RT's business section

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