Ravaged by the novel coronavirus pandemic, Hong Kong’s real gross domestic product is expected to plunge by 8.3 percent in the first quarter of this year, compared to the same period in 2019, according to the APEC Studies Program of the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong.
The city’s overall GDP is projected to shrink by 3 percent for 2020, representing a 3.4 percentage point downward revision from HKU’s previous forecast, and would be the largest decline since the 1998 Asian financial crisis, the university said on Thursday.
The disease’s rapid spread is likely to drag developed economies into a recession. Clouded by the pandemic, lingering trade tensions and the oil-price war, the output decline is expected to continue and drop by 5.2 percent in the second quarter of 2020, compared with the same period last year.
The SAR’s unemployment rate is anticipated to worsen to 4.5 percent in the second quarter as the city grapples with tough challenges amid adverse economic conditions this year.
The city’s GDP dropped 1.2 percent in 2019, compared to that of the previous year, while exports of goods declined 4.7 percent year-on-year last year.
The local jobless rate is at a nine-year high, aggravated by the pandemic that has severely disrupted a wide range of economic activities and dampened business sentiment.
The seasonally adjusted jobless rate from December to February rose to 3.7 percent, while the underemployment rate hit 1.5 percent during the same period — the highest in five years — according to Census and Statistics Department data released on March 17. In the three months ending January, the jobless rate was 3.4 percent.
Hong Kong’s hard-hit retail sales plummeted by a record 44 percent in February year-on-year, battered by the months-long citywide violent protests and the pandemic.
The SAR government has pledged a second round of financial aid worth billions of dollars to help businesses and wage earners weather the storm.
