Hong Kong's imports and exports of goods are expected to contract 6 per cent in value next year as weak overseas demand and shrinking global trade take a heavy toll, the Trade Development Council said.
By volume, the forecast year-on-year decline in trade is 3 per cent, effectively wiping out this year's gains. It would be the first time exports had contracted since 2001.
Warning of poor prospects next year for Hong Kong's key trading partners - the United States, the European Union and Japan - the council's chief economist, Edward Leung Hoi-kwok, said the relatively robust mainland market offered local firms the best hope in the downturn. Economists generally expect the city's economy to shrink next year.
'Given the economic headwinds, the long-running consumption spree in traditional markets, especially the United States and the European Union, has subsided, with consumer confidence hitting an all-time low,' he said. The three markets combined made up about 30 per cent of Hong Kong's total exports but a 60 per cent share of the city's exports of consumer goods.
According to the council's quarterly export index, which is an indicator of exporters' performance and prospects, the outlook has steadily deteriorated this year. The index has fallen to 22.3 points in the fourth quarter, down from 49.1 in the first quarter, 45.9 in the second and 33.9 in the third. A reading below 50 points to a pessimistic outlook by exporters.