HK economy shrinks 8.9% in first quarter

Hong Kong

Hong Kong's economy suffered its worst quarterly drop on record in the first three months of the year, as the coronavirus pandemic hobbled activity following months of unrest, final data showed on Friday.

The economy shrank 8.9 per cent in the first quarter compared with a year earlier, the third straight quarter of year-on-year contraction and its worst drop since records began in 1974. Q1's pace compares with a decline of 3 per cent in October-December 2019 period and an advance estimate of negative 8.9 per cent.

"Looking ahead, as many major economies are still facing the serious threat of Covid-19, the global economy may continue to experience sharp contraction in the near term despite the massive monetary and fiscal support measures from central banks and governments worldwide," government economist Andrew Au said.

"The progress of reopening the major economies and thus the timing and speed of recovery of the global economy will hinge on the developments of the pandemic and global public health situation, which are subject to huge uncertainties," he added. Other uncertainties, such as US-China trade relations, geopolitical tensions and global financial market volatility, also warrant attention, Mr Au noted.

On a quarterly basis, the economy contracted a seasonally adjusted 5.3 per cent for the January-to-March period, after a revised 0.5 per cent drop in the fourth quarter of 2019.

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Tourist arrivals dived 99.9 per cent year-on-year in April to just 4,125 visitors, Tourism Board data showed.

The government also reiterated its forecast for this year of a 4 per cent to 7 per cent contraction for Hong Kong's economy. REUTERS