HONG KONG – As the market enters the third quarter of the year, Hong Kong, for the first time in a decade, has confirmed that the economy is sinking into recession due to the unending protests against the government and the building tension of the U.S.-China trade war.
According to the data by the government, an economic decrease of 3.2% from July to September was noticeable in the preliminary trading.
Due to the contraction of their gross domestic product (GPA) for the second consecutive quarter, it has been declared that the economy of Hong Kong has recessed.
The unending anti-government protests are now posing a threat to the trading and financial center of Hong Kong. Analysts have said that the country is now facing a considerable slump compared to the SARS epidemic that happened way back in 2003.
Data shows that in 2018, the Hong Kong economy also contracted 2.9% in their preliminary trading. It is their weakest trading since the previous global crisis.
The Hong Kong government statement says that the domestic demand is deteriorating as the third quarter of the year approaches. The local social incidents have also caused a toll on any activities related to consumption.
They also said that restoring the harmony in society and ending the violent protests are both crucial to save the economy. The government is doing the best they can to handle the worsening situation of Hong Kong. They have also introduced necessary measures that aim to protect enterprises.
This is the first annual decline in Hong Kong since 2009.
The current political protests in the city are the worst in the record since their crisis from the reversion of British to Chinese rule that happened in 1997.
Tourists are now canceling their flights and bookings to Hong Kong, as they fear for their safety. And the retailers are struggling with the huge drop in sales while the stock market continues to waver. All of these factors are now adding to the pressure that Hong Kong is currently facing and the constant trade dispute between the US and China.
Data shows that the retail sales in August have dropped to 23% from 2018, and its September sales have also dropped to 18.3%.
As of today, some parts of the city are now considered paralyzed. The disruption of public transportation is also observed, and some shopping centers and other small businesses are now closing as the violent protests continue to worsen.