Hong Kong revised down the real gross domestic product (GDP) forecast for 2022 to 1 to 2 percent, from an earlier 2 to 3.5 percent, after taking into account the deteriorating export outlook.
According to government data showed on Friday, the city's economy contracted by 4 percent in the first quarter from the same period a year earlier, ending four quarters of recovery as the city imposed its most stringent measures to curb Covid
Growth in the fourth quarter of last year was 4.7%.
On a quarterly basis, the economy contracted by a revised seasonally adjusted 3 percent for the January-March period.
"Looking forward, the worsened global economic prospects may continue to weigh on Hong Kong's export performance," the government said in a statement.
It said domestic economic activities should show some revival with the easing Covid
outbreak and the gradual relaxation of social distancing measures, while the issue of a new round of consumption vouchers would support to domestic demand.
Meanwhile, Morgan Stanley estimates 0.5 percent GDP growth in Hong Kong in 2022 as the economy gradually recovers with the easing social distancing measures, led by private consumption.