Hong Kong GDP To Contract 6.1% In 2020

Hong Kong’s economy is projected to contract at the lower range of the August forecast this year, following the moderate improvement in the fourth quarter.

Gross domestic product contracted 3.5 percent on a yearly basis in the third quarter but much slower than the 9 percent decline seen in the second quarter, the Census and Statistics Department reported Friday. The third quarter rate was revised from -3.4 percent.

For the first three quarters as a whole, real GDP contracted by 7.2 percent from the same period last year.

However, barring any sharp resurgence in local Covid-19 infections, or abrupt relapse in global economic activity, the economy is expected to see further moderate improvement in the fourth quarter, government economist Andrew Au said.

The real GDP growth forecast for 2020 as a whole was revised down to -6.1 percent from -6 to -8 percent as announced in the August round of review.

The economist said the local stock market underwent some consolidation in the third quarter as the sentiment was dampened by tense China-US relations and the still-uncertain global outlook amid the Covid-19 pandemic.

On a seasonally adjusted quarter-to-quarter comparison, real GDP rebounded 2.8 percent in the third quarter, which was revised from the advance estimate of 3.0 percent. This was the first growth in six quarters.

According to the economic report, underlying inflation eased to 0.3 percent in the third quarter from 1.8 percent in the second quarter.

The forecast rate of underlying inflation for 2020 was revised downward to 1.3 percent from 1.8 percent and headline inflation to 0.3 percent from 0.8 percent in the August round of review.

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