Chen Maobo: Hong Kong's second quarter GDP negative growth of 9% is expected to be more pressured in the third quarter

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Written by: Kong Fanxu

2020-08-02 11:41

The new crown pneumonia is raging around the world. Financial Secretary Chen Maobo published a blog today (2), describing Hong Kong’s economic situation as worrying. After a negative GDP growth of 9.1% in the first quarter of this year, the second quarter still has a negative growth of 9%. In "Top Carriage", private consumption expenditure, local fixed asset formation, overall export of goods, tourism, etc. have all recorded declines. With more than 100 confirmed diagnoses every day, it is believed that Hong Kong’s economy in the third quarter may be under greater pressure. The Hong Kong government will put epidemic control first, so as to promote local economic activities and develop tourism.

The Financial Secretary Chen Maobo's blog stated that under the influence of the new crown pneumonia, the economy may be under greater pressure in the third quarter. (Profile picture/Photo by Zheng Zifeng)

Chen Maobo pointed out that in the "three-headed carriage" of Hong Kong's economy, private consumption expenditure fell by 14.5% year-on-year in the second quarter, which was 3.9 percentage points wider than the decline in the first quarter. Local fixed assets reflecting investment also experienced a decline in the previous quarter. Expanded to 20.6%. In terms of exports, the decline in overall cargo exports narrowed from 9.7% in the first quarter to 2.1% in the second quarter.

Expect more pressure in the third quarter

The tourism industry was also plagued by the epidemic and came to a standstill. In the second quarter, Hong Kong's exports of services plummeted by 46.6%. The epidemic eased slightly in June, and citizens resumed their daily routines a bit. The decline in retail sales immediately narrowed from 32.9% in May to 24.8% in June. The data reflects that the epidemic can be said to be the biggest constraint on economic activities.

Entering July, there was a third wave of outbreaks in Hong Kong. Between July 8 and the end of July, the number of newly confirmed cases reached 1,850, which is about 40% more than the 1,300 accumulated in the first half of this year. The number of newly diagnosed cases is still high at the level of more than a hundred. "In this way, the economy may be under more pressure in the third quarter."

▼The two-day ban on dine-in food is implemented and the government withdraws ▼

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Promote the local economy and tourism after the epidemic

Chen Maobo continued that in the face of the current difficulties, the SAR government will study how to provide support as much as possible. However, financial resources are always limited, and endless government assistance and relief cannot be a long-term strategy. To protect people's livelihood and stabilize the economy, the most important thing is to break through two cycles:

Internal circulation: The first thing is to "control the epidemic and clear cases" so that citizens can resume normal life and travel, and then the local economy can regain its vitality and momentum.

External circulation: If Hong Kong can manage the epidemic well, it can allow Hong Kong residents with health codes to travel to the Mainland and Macau for business and travel through the "travel bubble" arrangement; and through the same arrangement, allow business and tourists from the Mainland and Macau to come to Hong Kong .

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