Hong Kong’s battered economy will continue to shrink next year, says CPA Australia survey of accountants

Two thirds of accounting professionals surveyed by CPA Australia expect Hong Kong’s economy to contract in 2020

Almost a third of respondents expect companies to reduce headcount to cope with the tough business environment

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Accountants see a gloomy outlook for Hong Kong’s economy. Photo: AFP

Published: 5:30pm, 18 Nov 2019Updated: 6:29pm, 18 Nov 2019

Hong Kong’s accountants see a bleak outlook for the local economy as the city grapples with a recession caused by six months of increasingly violent protests, a slowing global economy and the US-China trade war.

Two thirds of accounting professionals surveyed by CPA Australia expect Hong Kong’s economy to contract in 2020, as the recession that began in the last quarter continues.

That represents a huge slump in economic confidence among respondents. This time last year just a fifth of those surveyed had expected a contraction, while a year before that only 4 per cent foresaw recession, according to a report by CPA Australia released on Sunday.

The accounting body surveyed 207 of its Hong Kong members between October 8 and November 1, and released its report on Sunday.

Almost three quarters of respondents think the Asian city’s competitiveness will decline, up 25 percentage points from 2019.

“There is no doubt that external and local uncertainties are making our respondents anxious over the economic outlook,” said Roy Lo, divisional president for Greater China at CPA Australia. “The slowing global economy, the US-led trade war, and lower economic growth in mainland China are negatively impacting Hong Kong’s economy, with the continuing social unrest making a tough situation worse.”

Hong Kong officially slipped into a technical recession in the third quarter as the economy shrank 3.2 per cent from the prior quarter, according to the Census and Statistics Department. A government spokesperson at the time said the city’s economic growth had deteriorated abruptly because of the social unrest that has gripped the city since early June.