Hong Kong economy continues weak performance in Q2

0 Comment(s)Print E-mail Xinhua, July 30, 2020
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Photo taken on Sept. 27, 2019 shows a night view of Hong Kong, south China. [Photo/Xinhua]

Hong Kong's economy slumped 9 percent year on year in the second quarter of this year as the COVID-19 epidemic dampened business activities and the impact of social unrest lingered.

The performance fell short of market expectations but still improved slightly from a record-high 9.1-percent drop in the first quarter, according to advance estimates of the Hong Kong Special Administrative Region (HKSAR) government Wednesday.

In a statement, a government spokesman said that the "overall economic conditions remained very weak."

Private consumption posted the steepest ever decline as consumer sentiments were severely disrupted by the threat of COVID-19 and social distancing measures. Investment also tumbled amid the austere business environment and a highly uncertain economic outlook.

But there were still signs of stabilization as the epidemic was once largely under control in May and June and the recovery of the mainland economy helped offset the external headwinds facing Hong Kong's goods exports, the spokesman said.

The gross domestic product (GDP) fell marginally by 0.1 percent during the April-June period on a quarter-to-quarter comparison, he added.

Analyzed by major GDP components, private consumption fell 14.5 percent in the second quarter from a year earlier, deteriorating further from the 10.6-percent decline in the first quarter. Government consumption went up 9.6 percent year on year in the second quarter, up from 8.8 percent in the first quarter.

Gross fixed capital formation dropped 20.6 percent in the second quarter from a year ago, sharper than the decrease of 15.8 percent in the first quarter.

Goods exports edged down 2.1 percent from a year earlier in the second quarter, narrowing from the 9.7-percent drop in the first quarter, while exports of services fell significantly by 46.6 percent.

Looking ahead, the spokesman said a challenging external environment will likely constrain Hong Kong's exports in the near term and the recent surge in COVID-19 cases locally has also clouded the economic outlook.

But he stressed that the economy will hopefully recover gradually in the rest of the year once the epidemic is contained again and the external environment improves.

Given the grave economic situation, the HKSAR government has rolled out unprecedented relief measures worth nearly 290 billion Hong Kong dollars (37.4 billion U.S. dollars) to help safeguard jobs, support enterprises and relieve people's financial burdens.

The revised figures on GDP and detailed statistics for the second quarter and GDP forecast for 2020 will be released on August 14.

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