Strife-torn Hong Kong's economy plunged into recession in the third quarter, falling 3.2% between July and September. Its administration blames "local social incidents" — a reference to 5 months of pro-democracy unrest.
Hong Kong, one of the world's financial hubs, also recorded a 2.9% third-quarter contraction compared to the same quarter in 2018, according to government data.
And, it calculated a larger 3.2% shrinkage compared with the second quarter, which also showed a contraction. A recession is defined as two consecutive quarters of negative growth.
Analysts quoted by Reuters warned that Hong Kong's slump — also attributed to US-China trade disputes — could end up longer and even deeper than during the 2008/2009 global financial crisis or the SARS epidemic of 2003.
City areas paralyzed for fifth day
As the data emerged Friday, parts of Hong Kong were paralyzed for a fifth day as pro-democracy protesters defied a warning by Chinese President Xi Jinping that China saw "stopping violence" in semi-autonomous Hong Kong as a top priority.
Hong Kong's government blamed the contraction on "local social incidents," saying they had taken a "heavy toll on consumption-related activities" and investment sentiment.
Expenditure on building and construction had dropped by 5.7% in real terms in the third quarter, compared to the same phase a year earlier. Exports of services had dropped 13.8% from a year earlier, said Hong Kong's Census and Statistics Department.
Despite cancelled tourism bookings and retailers left reeling from sluggish sales, thousands of mainly office workers took to city streets Friday, splaying five fingers to signify the protest movement's five demands, including the right to freely elect Hong Kong's leadership..
For the whole year 2019, the statistics office forecast a contraction of 1.3%, reversing an estimate of sluggish growth in the zero to one-percent range.
If confirmed by year's end, it would mark the first annual decline since 2009 as the world, when in the grip of a global financial crisis.
Hong Kong's blue chip share market index, the Hang Seng, ended the week at 26,327 — posting its worst week in more than three months.
ipj/ng (Reuters, AFP)