Hong Kong Economic Outlook
May 26, 2020The economy contracted at the sharpest pace on record in the first quarter. Private consumption plummeted at a double-digit rate, fixed investment declined markedly, while exports tumbled at the quickest clip in 11 years. Turning to the second quarter, the economy will be continuing to deteriorate despite an easing of lockdown measures in May and fiscal stimulus worth roughly 10% of GDP. In April, the manufacturing PMI remained deep in contractionary territory, while the unemployment rate spiked to the highest level since October 2009. Exacerbating matters, the possibility of last year’s pro-democracy protests returning could spell more trouble for the economy. On 21 May, China’s government proposed a controversial new national security legislation, which would give mainland intelligence officers enforcement powers that some analysts say could jeopardize rights and freedoms of Hong Kong citizens.
Hong Kong Economic GrowthThe economy will likely contract this year at the steepest rate on record, as the lockdown and weaker growth in mainland China weigh on activity. Nevertheless, strong fiscal stimulus should support a partial recovery in H2 this year. Our panel projects the economy will contract 4.9% in 2020, which is down 1.1 percentage points from last month’s forecast. Moving to 2021, the panel sees the economy growing 4.0%.
Hong Kong Economy Data
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Hong Kong Facts
|Bond Yield||1.82||3.38 %||Dec 31|
|Exchange Rate||7.79||-0.11 %||Jan 01|
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Hong Kong Economic News
July 1, 2020
On 30 June, the new security law for Hong Kong came into force, which will increase Beijing’s hold over the territory.
June 30, 2020
Write intro here Retail sales fell 33.9% year-on-year in May (April: -37.5% yoy).
June 22, 2020
Inflation came in at 1.5% in May, easing from April’s 1.9%.
June 3, 2020
The IHS Markit SAR (private sector) Purchasing Managers’ Index (PMI) increased to 43.9 in May from 36.9 in April, but remained below the 50-threhold that indicates an improvement in the private sector economy over the previous month.
June 1, 2020
Retail sales fell 37.5% year-on-year in April (March: -44.0% yoy). The result was driven by a more moderate drop in food and non-alcoholic beverages sales.