A man wearing a face mask as a preventive measure walks past a closed bar in Hong Kong.
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Hong Kong’s economy contracted by 9% in the second quarter compared to a year ago. It was the fourth consecutive quarter of year-over-year decline in gross domestic product, official statistics showed Friday.
The updated data on the city’s economic performance exactly matched its official advance estimates.
The Hong Kong government also downgraded its full-year economic forecast. It now expects the city’s economy to shrink by between 6% and 8% in 2020, compared to its previous projection for a contraction of between 4% and 7%.
Economists had earlier warned that Hong Kong — a semi-autonomous Chinese territory and a major financial hub in Asia — would struggle to recover from its economic slump given a recent flare up in coronavirus cases. Several analysts downgraded their GDP forecasts for the city last month.
The renewed outbreak, which began in July, led the government to tighten social-distancing measures that includes a ban on large gatherings and restrictions on dine-in services at restaurants. Hong Kong’s leader Carrie Lam also warned that the increase in daily infections could overwhelm the city’s health-care facilities and cost lives.
Hong Kong’s economy was already in a recession before the coronavirus pandemic. It was partly the result of large-scale pro-democracy protests that dragged on for months last year, and hurt businesses and tourism-related industries. Global uncertainties, such as the U.S.-China trade war, also dealt a heavy blow to its economy.
Source: CNBC