Hong Kong’s economy will struggle to expand at all this year, the latest Bloomberg survey of economists shows, as the city grapples with Covid restrictions, a trade slump and other global headwinds.
The government is set to cut its forecast for GDP growth for the year when it reports final GDP figures for the April-to-June period on Friday. That would be the second downgrade this year, after officials cut their forecast in May to a range of 1 percent to 2 percent growth.
The median estimates for third- and fourth-quarter growth were also trimmed to 1.8 percent and 2.9 percent, respectively, from 2.3 percent and 4.1 percent. In addition, Covid outbreaks and restrictions in mainland China have hurt Hong Kong’s trade. After posting double-digit growth every month last year, Hong Kong’s exports contracted in May and June as demand in China slumped.
The restrictions also contributed to a record brain drain, with the city’s population falling 1.6 percent to around 7.29 million in the year ended June 30, government dataHong Kong did get some good news this week when Chief Executive John Lee said the city would reduce the amount of time arrivals must spend in hotel quarantine.