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Hong Kong Headed For Worst Recession In Decades

November 1, 2019

"The downside risk to the forecast is significant. If the political unrest prolongs beyond this year, I would expect next year's GDP to contract as well."

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Following months of several protests in Hong Kong, the hopes of the country having a good economy is about to be dashed as the country is about to be hit with the worst recession in decades.

American news outfit, CNN, in a news report on Thursday reported that the economy shrank by 3.2% in the last three months when compared to the previous quarter.

CNN quoted a government spokesperson as saying that Hong Kong’s economic growth had been on an upward trend since last year despite a slowing global economy and US-China trade tensions, but "the situation showed an abrupt deterioration recently due to the severe impacts of the local social incidents".

Tommy Wu, a Hong Kong-based economist with Oxford analyzed what the recession would do to the economy of the country.

"The downside risk to the forecast is significant. If the political unrest prolongs beyond this year, I would expect next year's GDP to contract as well.

"Mass demonstrations have decimated the city's tourism industry. Visitor numbers plunged 37% year on year for the third quarter.

"Hotels are on average only two-thirds full, a drop of 28% compared to the same period a year earlier. InterContinental Hotels Group said in an earnings report earlier this month that revenue per room in Greater China fell 36% last quarter, citing "ongoing unrest in Hong Kong," Wu said.