Hong Kong's economy is set to contract in the fourth quarter after six months of violent social unrest, the city's financial chief said Sunday.
"Based on the situation of these few months, it is inevitable that negative growth will continue," Hong Kong Special Administrative Region (HKSAR) Financial Secretary Paul Chan Mo-po said in a blog post.
HKSAR Chief Executive Carrie Lam said earlier this month that the government had about 1.1 trillion Hong Kong dollars in fiscal reserves to weather pressures from the prolonged protests as well as the bruising China-U.S. trade disputes. The HKSAR government is set to record its first budget deficit in 15 years.
"This means the government will be less flexible in using financial resources under an economic recession," said Chan.
The turmoil which started in June has undermined Hong Kong's economy, and it shows in the figures.
The economy shrank by a seasonally adjusted 3.2 percent in July-September from the previous quarter, in line with a preliminary reading, revised government data showed in mid-November.
Hong Kong's GDP contracted for the second consecutive quarter, meeting the technical definition of a recession – the first annual contraction since 2009.
The government's latest forecast is for an annual economic contraction of 1.3 percent for 2019.
To help businesses and residents weather hardships, the HKSAR government has unveiled four rounds of economic relief measures amounting to 24 billion Hong Kong dollars since August.
