Hong Kong’s economy suffered its worst quarter on record, extending the first recession in a decade as the coronavirus pandemic battered a city already weakened by political unrest.
Pandemic and Politics Push Hong Kong’s Economy Into Record Slump.
Months of anti-government protests and the US-China trade war forced Hong Kong into its first recession in a decade last year. Now the coronavirus
risks plunging the Asian financial hub into its worst ever slump.
The economy contracted 8.9% in the first quarter from year-ago levels, according to the government. The decline surpasses the previous record of -8.3% in the third quarter of 1998 and a 7.8% contraction in the first quarter of 2009, the two worst readings in data back to 1974, according to the Census and Statistics Department Hong Kong.
"The threat of Covid
-19 seriously disrupted a wide range of local economic activities and supply chains in the region," a government spokesman said in a statement that accompanied the data. "With the disease evolving into a pandemic in March, the economic fallout became even more severe."
The latest decline also marks the third straight quarterly contraction for Hong Kong, the longest such stretch since the aftermath of the global financial crisis in 2009. The economy started shrinking from the third quarter of last year amid violent street protests and a government crackdown, political factors that remain unresolved.
“Our economic situation is very challenging, we are deep into recession,” Financial Secretary Paul Chan said at a press conference after the data was released. “Globally the epidemic is yet to be put under complete control. That will affect our export, that will also affect international traveling and business investment. Going forward, the second quarter, we believe that even if there is improvement, the improvement will be gradual and small.”