HONG KONG – Hong Kong’s economy jumped back into growth in the first quarter of the year, official figures showed today, ending the city’s most pronounced period of recession in its modern history.
The international financial hub has been battered over the last two years by a triple whammy of the United States-China trade war, months of social unrest, and the Covid-19 pandemic.
It recorded six consecutive quarters of negative growth, a more prolonged downturn than during both the 1997 Asian financial crisis and 2007-08 global crash.
That came to an end today, when the government announced that the economy grew 7.8% on-year in the first three months of 2021.
Hong Kong was one of the few places in the world unlucky enough to enter the coronavirus crisis already mired in a deep recession.
In 2019, months of huge and often violent pro-democracy protests coincided with swirling trade tensions between Beijing and Washington, pummelling the economy that acts as an international gateway to China.
The city was among the first places outside the mainland to record a Covid-19 infection, and the economy plunged by a record-breaking 9.1% in the first quarter of 2020.
Since then, Hong Kong has managed to keep the virus’ spread down to a little more than 11,000 infections thanks to strict quarantine and economically punishing social-distancing measures.
This year’s economic rebound was largely sparked by a sharp resurgence in exports fuelled by recoveries in both China and the US.
Finance Secretary Paul Chan has forecast a full-year growth of 3.5% to 5.5% for 2021.
But, the city has warned that the economy remains below its pre-pandemic levels, and that recovery will be uneven.
Coronavirus restrictions are keeping Hong Kong all but closed to those without work permits, and people who do arrive need to undergo three weeks of compulsory hotel quarantine.
The tourism and retail sectors remain on their knees, and unemployment is around 7%, the highest rate in years.
While political stability has returned, an ongoing crackdown on dissent and moves to make the semi-autonomous city more like the authoritarian mainland continue to rattle business confidence.
A quick journey out of the pandemic looks unlikely as well.
Hong Kong has managed to secure ample doses of Covid-19 vaccines, but many residents are hesitant to listen to a government that suffers from a palpable trust deficit.
So far, just 12% of the city’s 7.5 million residents have taken one or more vaccine doses. – AFP, May 3, 2021
