The Government Economist, Mr Andrew Au, described the economic situation in the third quarter of 2019 and provided the latest GDP and price forecasts for 2019 as a whole.
The Hong Kong economy saw an abrupt deterioration in the third quarter of 2019, as the local social incidents dealt a very severe blow to an economy already weakened by a synchronised global economic slowdown and US-Mainland trade tensions. After growing mildly by 0.4% in the second quarter, the economy contracted by 2.9% in the third quarter from a year earlier, marking its first year-on-year decline since the Great Recession of 2009. On a seasonally adjusted quarter-to-quarter comparison, real GDP contracted significantly by 3.2% in the third quarter after a 0.5% decline in the preceding quarter, indicating that the economy has entered a recession.
Considering the actual outturn of a 0.6% contraction in the first three quarters of 2019 and the persistent notable downward pressures, the real GDP growth forecast for the year as a whole is revised downwards from 0 to 1% as announced in the August round of review to -1.3% in the current round. This would be the first annual decline since 2009. Ending violence and restoring calm are pivotal to the recovery of the economy. The Government will continue to closely monitor the situation and introduce measures as necessary to support enterprises and safeguard jobs.
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