Coronavirus: Hong Kong economy shrinks by a worse than expected 4 per cent in first quarter
- Contraction of Hong Kong’s gross domestic product in first quarter reverses year-on-year growth reported for 2021
- Government spokesman says ‘wide range of economic activities’ hit hard by fifth coronavirus wave, anti-epidemic measures
Hong Kong’s economy shrank by 4 per cent during the first quarter of 2022, worse than previously expected by analysts, as businesses were hammered by a fifth wave of coronavirus infections and a fresh outbreak across the border in mainland China.
According to preliminary data released by the Census and Statistics Department on Tuesday, the contraction is the city’s first since the fourth quarter of 2020. The figure was worse than the median 1.3 per cent decline estimated by 11 economists.
The department found that all of the indicators for economic performance, such as private consumption and unemployment levels, worsened between January and March.
A government spokesman said the Hong Kong economy faced “immense pressure” in the first quarter as well as “significant challenges” in the near term.
“Externally, moderating global demand growth and epidemic-induced cross-boundary transportation disruptions posed substantial drags to exports. Domestically, a wide range of economic activities as well as economic sentiment were hard hit by the fifth wave of the local epidemic and resultant anti-epidemic measures,” he said.
The spokesman added that the Russian invasion of Ukraine would lead to higher energy and commodity prices, exacerbate supply chain disruptions and dampen economic sentiment.
The contraction of the city’s gross domestic product (GDP) reversed year-on-year growth in 2021, after last year’s fourth quarter experienced a 4.7 per cent increase, as well as a 5.5 per cent rise in the third quarter.
