Hong Kong is anticipated to confirm on Friday it tipped into recession for the first time in 10 years, amid concerns the economy could be in even worse shape than feared as months of anti-government rallies take a heavy toll.
Preliminary numbers in October showed the Chinese-ruled city’s economy shrank by 3.2% in July-September from the previous interval, contracting for a second consecutive quarter and meeting the technical explanation of a recession.
With no end to the increasingly violent protests in sight, analysts say the hunch could be extended and profound, with gross domestic product seen shrinking further this quarter and nicely into 2020.
The financial and trade facility was already under intense pressure from the extended tariff war between Washington and Beijing, however, the more and more violent protests, which have gone on for over five months, have given a decisive blow.
Frequent transport disturbances, violent clashes between police and demonstrators, and the use of tear gas have injured the retail sector and scared off tourists, particularly from mainland China, who made up nearly 80% of the 65.1 million travelers to the city last year.
August retail sales had been the worst on record – down 23% from a year prior – whereas September’s plunged 18.3%.
Shops, restaurants, and different businesses throughout the Chinese-ruled metropolis more and more shut early as protests spring up, at times daily, and sometimes with little or no notice. Some smaller companies have had to close for good.
Business activities in the private sector plunged to its worst in 21 years last month, according to IHS Markit. Also, the demand from mainland China decreased at the sharpest rate in the survey’s history – which began in July 1998.