The economy will shrink 4 per cent this year as the full effect of an unprecedented recession takes hold, according to Financial Secretary Donald Tsang Yam-kuen.
A contraction of gross domestic product on that scale would result in a massive turnaround on last year, when GDP grew by 5.3 per cent.
Presenting the SAR's half-yearly economic report, Mr Tsang said the regional slowdown and dented domestic consumer confidence - combined with a lacklustre economic performance to date - would curtail growth this year.
'We have never seen financial turmoil on this scale,' said Mr Tsang.
The Government's new estimate compares with an average 3 per cent figure given by eight local professional forecasters.
Initial indications suggested second-quarter growth would be minus 5 per cent, coming on top of minus 2.8 per cent in the first quarter.
