With no plans to end the protests any soon, analysts warn the financial and trading center potentially faces a longer and deeper slump than during the global financial crisis back in 2008/2009 and the SARS epidemic in 2003.
Hong Kong sank into recession for the first time in 10 years in the third quarter, government data confirmed on Friday, weighed down by increasingly violent anti-government protests and the escalating United States-China trade war.
The economy shrank by 3.2 percent in July-September from the previous quarter on a seasonally-adjusted basis, revised government data showed, in line with a preliminary reading.
“Ending violence and restoring calm are pivotal to the recovery of the economy. The government will continue to closely monitor the situation and introduce measures as necessary to support enterprises and safeguard,” the government said.
More than five months of political protests have plunged the city into its worst crisis since it reverted from British to Chinese rule in 1997.
Tourists are cancelling bookings, retailers are reeling from a sharp drop in sales and the stock market is faltering, adding to pressure the city is feeling from China’s economic slowdown and the prolonged China-US trade dispute.
August retail sales were the worst on record – down 23 percent from a year earlier – while September’s plunged 18.3 percent.
Parts of the city were paralyzed for a fifth day on Friday. Transportation disruptions have become common and some shopping malls and other businesses are shuttering early as the unrest escalates.