Hong Kong downgrades full-year GDP growth forecast to 3.2 per cent contraction amid Covid woes, city among region’s worst performers as rivals already reopen to world

Hong Kong has downgraded its full-year economic forecast from between 0.5 per cent growth and 0.5 per cent contraction to a 3.2 per cent drop amid an ongoing recession, citing a deteriorating external environment and the Covid-19 pandemic.

The city will be among the worst performers in the region compared to its neighbouring rivals which have already opened up. Singapore, whose economy grew 4.4 per cent in the third quarter compared to the same period last year, earlier revised its GDP forecast for this year to 3-4 per cent.

Government economist Adolph Leung Wing-sing on Friday said the adjustment was made after external factors, such as rising global inflation and the tightening of monetary policy by major central banks, were worse than expected in the past six months, as well as slow domestic economic recovery.

“With these two factors combined, our third quarter situation will be much worse than expected. This also led us to downgrade our full-year economic forecast quite significantly,” Leung said.

According to the government, the city’s economy showed a widened year-on-year contraction in the third quarter of this year.