HK economy suffers worst quarterly contraction since records began, Latest World News - The New Paper

HK economy suffers worst quarterly contraction since records began

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HONG KONG: Hong Kong suffered its worst quarterly contraction since modern records began, official figures showed yesterday, as the coronavirus outbreak hammered an economy already mired in recession from political unrest and trade war woes.

The financial hub is now experiencing its third straight quarter of negative growth - its longest financial downturn since the aftermath of the 2008 global financial crash.

Months of debilitating street protests and the tit-for-tat tariff battle between Washington and Beijing had weighed on the local economy for months before the pandemic helped push the city deeper into recession.

Advance figures released yesterday showed an 8.9 per cent year-on-year contraction in the first quarter - the worst decline since the government began compiling data in 1974.

The result was a bigger fall than the 8.3 per cent recorded during the Asian financial crisis in 1998 and the 7.8 per cent seen in early 2009.

The figures were worse than most projections, even though the city has made impressive headway against the outbreak.

Despite its proximity and links with China, confirmed infections have been kept to around 1,000, with just six deaths.

The financial hub has managed to largely end local transmissions of the disease, with almost all new cases coming from people returning to the city from overseas who are quickly quarantined.

Officials are beginning to ease some social distancing measures, in a move that will boost the local economy.

"Even if there is improvement, it will be gradual and small," said financial secretary Paul Chan, who estimates the economy will contract between 4 and 7 per cent this year. - AFP