Editorial | Make Covid changes for good of Hong Kong, but keep US dollar peg
- The financial secretary has warned that growth is set to take another hit from continuing quarantine rules at a time of rising American interest rates, capital flight and China-US tensions
When an international finance centre such as Hong Kong is facing low economic growth, capital flight to other shores and the cold shoulder from travellers, concern for the future can be contagious. It is therefore good for someone politically accountable to be frank about what to expect, what can be changed and what will not.
In an exclusive interview with the Post, Financial Secretary Paul Chan Mo-po warned the city to expect a further downgraded growth forecast after a lacklustre second-quarter economic performance, and even hinted Hong Kong could be on the brink of a technical recession.
Consumer spending had picked up, but exports and investment were sluggish. But it is within the government’s power to change that, which it has implicitly acknowledged.
Chan said the city’s strict quarantine rules had been the “most critical constraint we are facing and we have to overcome” in trying to improve economic recovery from waves of Covid-19 infections.
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Hong Kong to revise GDP forecast downwards: finance chief Paul Chan
This has prompted the government to seriously consider relaxing quarantine measures that have deterred business and pleasure travel to the city. As we reported on Tuesday, this includes cutting week-long hotel quarantine for new arrivals to three or four days, followed by home quarantine.