Protest-hit Hong Kong economy faces second blow from coronavirus, says finance chief Paul Chan
- Writing on his weekly blog, Chan says catering, retail and tourism ‘will fall into a deeper winter’
- Budget deficit set to grow, with government’s economic forecast for the year dependent on how bad the outbreak gets, he adds
Hong Kong’s economy is likely to continue contracting into 2020 as the coronavirus outbreak adds to challenges already posed by months of social unrest, the finance chief warned on Sunday, as the government estimated its budget deficit was set to grow.
Paul Chan Mo-po issued the warning in his weekly blog on Sunday, saying the contagion meant a double blow for the city, where the government has already estimated its first fiscal shortfall in 15 years, for 2019-20.
Some economists said the outbreak would deal a heavier blow than the ongoing anti-government protests, and predicted a slight economic contraction in the first quarter of this year.
“The catering, retail, tourism and consumer industries, which have been under pressure for the past six months, will fall into a deeper winter,” Chan wrote. “Small and medium enterprises, as well as workers, are facing larger pressure too.”
He said growth estimates from different organisations for 2020-21, made before the virus outbreak, varied between a 4.1 per cent contraction and growth of 2 per cent, with the median at zero.