HONG KONG: Hong Kong’s lengthy recession confirmed indicators of easing within the third quarter, with a gradual enchancment in home and exterior demand from an bettering Chinese language financial system, an easing of the COVID-19 outbreak and stronger monetary market exercise.
The financial system shrank 3.4% in July-September from a yr earlier, its fifth straight quarterly contraction, authorities advance estimates confirmed on Friday. That in contrast with a year-on-year contraction of 9.0% in April-June.
Exercise picked up markedly from a droop early within the yr as anti-virus measures had been progressively relaxed and other people returned to workplaces and shops.
“Trying forward, the continued strong restoration of the mainland (Chinese language) financial system ought to render assist to Hong Kong’s exports within the coming few months,” a authorities spokesman mentioned in a press release.
The federal government mentioned world demand and commerce flows would additional enhance if the restoration of main superior economies continues, and financial actions ought to preserve recovering this yr if native COVID-19 infections stabilise.
On a seasonally adjusted quarter-on-quarter comparability foundation, gross home product (GDP) elevated 3.0% from the second quarter, in contrast with a 0.1% slide within the earlier three months.
Financial situations had deteriorated with a 3rd native wave of infections from the pandemic, however the strain confirmed indicators of stabilising because the virus state of affairs abated in September.
“I hope that the immigration insurance policies might be relaxed by the primary quarter of subsequent yr, then the financial system can actually start to get better,” mentioned Samuel Tse, an economist at DBS Financial institution.
The worldwide monetary hub’s financial system had already been hit by typically violent anti-government protests late final yr and the U.S.-China commerce struggle.
Advance readings confirmed consumption and funding remaining weak within the third quarter, although financial exercise probably drew some assist from a powerful bounce in China’s financial system and from the Hong Kong authorities’s stimulus measures.
Hong Kong’s unemployment price rose to six.4% in July-September, the very best in round 16 years.
Town’s vacationer arrivals in September plunged 99.7% from a yr earlier to a provisional 9,132 guests, the tourism board mentioned, largely attributable to COVID curbs on guests.
“COVID-19 will stay a serious draw back threat to the worldwide and native financial system till efficient vaccines are broadly obtainable,” the federal government spokesman mentioned. “The tourism business is unlikely to see a swift rebound with widespread journey restrictions in place,”
Long term, questions are being raised about Hong Kong’s function as a finance centre, after Beijing imposed a sweeping safety legislation on town on July 1, heralding a extra authoritarian period for China’s freest metropolis.
The legislation, which critics say is curbing the freedoms that helped Hong Kong prosper, prompted Washington to revoke its particular financial standing which together with lowered tariffs in contrast with the remainder of China.
Hong Kong and Chinese language authorities justify the laws as very important to revive stability and prosperity.
“The evolving China-US relations, heightened geopolitical tensions, and the opportunity of a disorderly Brexit additionally add to uncertainties,” the spokesman added.
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