Hong Kong Books Worst Quarterly Economic Contraction
What’s New: Hong Kong’s economy contracted 8.9% in the first quarter from a year ago, its worst quarterly decline on record, reflecting disruption from the Covid-19 pandemic on top of months of social unrest and the China-U.S. trade war.
The drop surpassed a 7.8% contraction in the first quarter of 2009 and was the worst reading of the city’s economy since 1974, according to the Census and Statistics Department Hong Kong.
Hong Kong’s economic situation is sliding “deep into recession,” said Financial Secretary Paul Chan at a press conference Monday.
Background: The contraction extended a recession that started for Hong Kong last year under the shadow of the China-U.S. trade war and persistent social unrest in the city. Hong Kong registered a 1.2% decline in gross domestic product in 2019, the first annual shrinkage in a decade.
The first quarter was the third straight quarterly contraction for Hong Kong. Goods exports slumped 9.7%, compared with a 2.5% drop the previous quarter, reflecting global supply chain disruptions amid the pandemic. Services exports fell a record 37.8% as the tourism industry has hit hard.
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