As protests hit the economy continuously for five months, Hong Kong faces a severe slowdown in its growth. Protests against the government are driving down growth, fear analysts.
Demonstrators wearing masks have been hurling petrol bombs in protest on Sunday. Police have retaliated with water cannons, tear gas, and rubber pellets. This routine of protest and response from police has been going on for days.
Paul Chan, the financial secretary says that it is a big blow to the economy. The third quarter will project a negative growth, he says. It will become a recession if two continuous quarters show a decline and Hong Kong is heading towards it, says Chan in his blog.
Exports have slid by more than 7 percent, which is the poorest drop in a quarter in almost a decade, says Chan.
Before the protests, the city was expected to show a growth rate of 0 percent to 1 percent, but with the protests, this forecasted growth will not be reached, he says.
Protestors have been targeting tourist areas and important shopping areas in Hong Kong. This has brought a sharp decline in visitors and revenue from tourism has declined drastically. It has gone down by 37 percent year-on-year for the third quarter.
The number of visitors arriving in Hong Kong has dropped almost 50 percent in the first half of October when compared to the previous year. Hotels have seen a decline by 28 percent when compared to last year, says Chan.
Apart from the protests, businesses have been hit by the ongoing trade war between the U.S. and China. Large trade units are seeing a sharp slide in volume with the trade war and the demonstrations. Economic measures were announced by Chan last week to protect trade and businesses, affected by the protests.
However, the Hang Seng Index continues to remain high. It is up by 4 percent this year, though the economy has been ravaged.
Joyce Solomon completed B.E. in Computer Engineering and started working as a Technology Analyst. But, her zeal to write the latest trends in the Technology domain persuaded her to work as an Associate Editorial for Global Industry News 24’s Technology domain news section. She has a total experience of approximately 5 years. By providing excellent-quality news reports, she has made a significant contribution to Global Industry News 24’s Technology section. Her leadership and problem-solving skills have always helped her to rise above the challenges. Along with the strong writing skills and a very good grasping power, Joyce is passionate about learning the latest technology and tools that can help her advance her productivity.
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