HONG KONG • Hong Kong’s economy suffered its worst quarterly drop on record in the first three months of the year, as the coronavirus pandemic hobbled activity following months of unrest, final data showed yesterday.
The economy shrank 8.9 per cent in the first quarter compared with a year earlier, the third straight quarter of year-on-year contraction and its worst drop since records began in 1974.
The first quarter’s pace compares with a decline of 3 per cent in the October-December period and an estimate of an 8.9 per cent drop.
Government economist Andrew Au said in a statement: “Looking ahead, as many major economies are still facing the serious threat of Covid-19, the global economy may continue to experience sharp contraction in the near term despite massive monetary and fiscal support measures from central banks and governments worldwide.
“The progress of reopening the major economies, and thus the timing and speed of recovery of the global economy, will hinge on the developments of the pandemic and global public health situation, which are subject to huge uncertainties.”
He added that other uncertainties, such as United States-China trade relations, geopolitical tensions and global financial market volatility, also warrant attention.
On a quarterly basis, the economy contracted a seasonally adjusted 5.3 per cent for the January-March period, after a revised 0.5 per cent drop in the fourth quarter of last year. Tourist arrivals dived 99.9 per cent year on year last month to 4,125 visitors, Tourism Board data showed.
About 25 per cent of retail stores in the city were expected to close by the end of the year, despite fresh government relief measures, according to the Hong Kong Retail Management Association.
Total retail sales value plunged by 35 per cent in the quarter from the same period last year. The volume of retail sales fell by 36.9 per cent year on year, the largest decline for a single quarter on record.
Analysts still predict a poor performance in the second quarter before a modest recovery in the second half of the year.
REUTERS
Analysts still predict a poor performance in the second quarter before a modest recovery in the second half of the year.