Hong Kong plunges into recession as protests, trade war take toll

Hong Kong falls into first recession in 10 years as protests, trade war weigh

Hong Kong in recession as GDP plunges 3.2% in third quarter

The tactic has become familiar in five months of often violent unrest over perceived Chinese meddling with the city's promised freedoms.

Earlier in the day, authorities had announced that Lan Kwai Fong, a popular district with a high concentration of bars and clubs, would be closed in anticipation of the protests.

Analysts said the third quarter contraction - which followed a 0.5% drop in gross domestic product in the three months to June - would be the start of a prolonged slump that would cause permanent damage to Hong Kong's reputation as a place to do business.

On a year-on-year basis, Hong Kong's economy dropped 2.9%, marking the first quarterly decrease in a decade.

Hong Kong has officially slipped into a technical recession as the city's economy continued to deteriorate in the third quarter, according to official data released Thursday.

The government also revised down second-quarter GDP data to show growth of 0.4 percent year-on-year, from a preliminary estimate of 0.6 percent and a later reading of 0.5 percent.

Hong Kong will release revised its GDP figures and GDP forecast for the whole of 2019 on November 15, according to the government statement.

Despite the hard external and domestic environment, Hong Kong retains its core strengths as an global financial center with an unrivalled geographical location, the rule of law, an independent judiciary, the free flow of information and a wide pool of professional talents, she said.

The country has been weighed down by increasingly violent anti-government protests and the protracted US-China trade war.

Capital Economics said in a research note that while GDP would probably continue to contract in the fourth quarter, the pace of contraction should ease barring a further escalation in the demonstrations.

Some protesters have thrown petrol bombs at police, lit fires across the Asian financial hub and trashed buildings during recent demonstrations.

Protesters wore a wide range of costumes, including Guy Fawkes masks, Joker makeup and tear gas canisters.

This month Hong Kong leader Carrie Lam banned protesters from wearing face masks under a British colonial-era emergency law, but the measure has been largely ignored. The global trade war has already compounded it economic woes.

Business has plunged in Hong Kong's shopping districts after more than four months of protests.

But there is no guarantee Beijing will come to Hong Kong's rescue as it has done during previous downturns, at times relaxing mainland visitor restrictions to boost tourism.

"While external uncertainties have brought up huge pressure, I would say that the local situation is much more worrying", she stressed, adding that the ongoing extensive conflicts and violence that have plagued Hong Kong for months have spread chaos and fear and seriously disrupted people's daily lives.

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