The fallout on the Hong Kong economy from the disasters in Japan will be greatest in the next three to six months, according to the Hong Kong Trade Development Council's chief economist.
'We think the difficulties and disruptions will be the greatest in the second quarter,' Edward Leung Hoi-kwok said.
Japan is Hong Kong's third-biggest export market. Exports to Japan were worth more than US$16 billion last year, or about 4.2 per cent of the city's total.
About 47 per cent of Hong Kong's exports to Japan were consumer goods, and the rest were raw materials and semi-finished goods.
'It will not only affect Hong Kong's business in consumer goods. Because of the power supply shortages, transport chaos and damage to infrastructure, the entire manufacturing industry is going to face huge challenges as many electronic parts are produced in Japan,' Leung said.
He said the economic damage caused by the disaster was likely to be higher than that inflicted by the 1995 Kobe earthquake, when Japan's GDP shrank by 2 per cent.