Why cutting quarantine won’t be enough to revive Hong Kong’s economy: experts urge reopening of borders, full travel resumption
- Experts predict anaemic GDP growth of between 0.75 per cent and 1.5 per cent for the year
- They say fuller measures needed to reboot tourism and related sectors
Cutting the quarantine period for arrivals in Hong Kong will not significantly boost local gross domestic product stunted by Covid-19 restrictions, economists have warned, as they predicted anaemic growth of between 0.75 per cent and 1.5 per cent for the year.
The experts all said that only reopening the city’s borders with mainland China and resuming quarantine-free travel would help revive the economy as the measures would reboot tourism-related sectors, such as retail, hotel and aviation.
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Chan pointed out that while consumption had picked up, exports and investments remained sluggish, saying quarantine rules had been the “most critical constraint that we are facing and we have to overcome” in trying to improve economic recovery.
The Post earlier reported that health officials were “actively considering” cutting the week-long hotel quarantine period for arrivals to three or four days, with authorities hoping at the same time to launch a mainland China-style two-colour health code to better control the movement of infected patients and incoming travellers.
Iris Pang, chief economist for Greater China at financial services firm ING, said that even if the quarantine period was reduced, the economic impact would be extremely limited so long as the border with the mainland remained closed.
“The move could help spur the economy but the impact will be very little,” she said. “It can increase air travel business, as well as bookings of air tickets and hotels. But it won’t help our inbound tourism as foreign travellers will no longer visit Hong Kong where they are still required to undergo quarantine.”
Pang estimated GDP would contract by 1 per cent in the second quarter but rebound to 0.75 per cent growth for the whole year provided Hong Kong reopened its borders with the mainland in the final quarter.