Hong Kong downgrades economic forecast for 2022 after first-quarter GDP shrinks worse-than-expected 4 per cent
- Government downgrades its full-year forecast for economic growth to 1-2 per cent for 2022
- Combined effects of slower global demand, disruptions in cross-border trade and the pandemic took their toll on city, government economist says
Conceding the overall performance was worse than expected, government economist Adolph Leung Wing-sing on Friday said gross domestic product shrank 4 per cent year on year in the first quarter under the combined effects of slower global demand, disruptions in cross-border trade and the pandemic.
Hong Kong’s stock market was volatile between January and March while the property sector remained soft and prices fell further, he said.
“The worsened global economic prospects may continue to weigh on Hong Kong’s export performance,” Leung said, pointing to the ongoing conflict in Ukraine as keeping international energy and commodity prices elevated, aggravating supply chain and transport disruptions, and dampening economic sentiment.
As a result, he raised concerns about rising inflation, which could trigger key central banks to tighten monetary policy, in turn curbing economic growth.
Leung saw a threat to economic growth and property prices from interest rate rises, which were expected to jump faster and with greater magnitude in coming months.