Hong Kong confirmed Monday the country plunged into a recession in 2019, suffering its first annual contraction in a decade, after falling under the twin pressures of the US-China trade war and months of pro-democracy protests. China’s coronavirus outbreak is now adding to the economic pressure.
Government data released Monday showed Hong Kong’s Gross Domestic Product in 2019 contracted by 1.2% on-year.
In the three months ending in December, the economy shrank 2.9% on-year, the third straight quarter of declines. The government said earlier Hong Kong fell into recession after activity contracted by 2.8% in the three months ending in September.
2019 was the worst for Hong Kong’s growth since 2009. The trade war between Beijing and Washington hit the export-heavy economy hard and protests that began in June over a proposed extradition law took a heavy toll on consumption and tourism.
Though the protests have been less intense so far this year, economists say the coronavirus outbreak is now emerging as a new economic threat. China’s coronavirus outbreak is prompting the territory and other governments to impose travel curbs that have disrupted business.“
The coronavirus outbreak will probably keep the city in recession for a while longer,” Capital Economics wrote in a note to clients after the GDP figures were released.
The Hong Kong government said in a statement, “The outlook for the Hong Kong economy in 2020 is subject to high uncertainties.”