Hong Kong’s GDP Declined by 6.1% Last Year the Largest Drop in History

The Census and Statistics Department of the Hong Kong Special Administrative Region Government announced on the 29th that Hong Kong’s 2020 GDP fell by 6.1% year-on-year, not only the largest annual decline since 1961, but the Hong Kong economy has also fallen into recession for two consecutive years.

Affected by the anti-transmission movement, Hong Kong’s GDP declined by 1.2% in 2019, the first time Hong Kong has experienced negative economic growth since 2009.

According to a press release on the official website of the Hong Kong Census and Statistics Department, a spokesperson for the Hong Kong Government said that the Hong Kong economy continued to recover in the fourth quarter of 2020, but the pace of recovery was slow due to the fourth wave of the local epidemic.

On a seasonally adjusted quarter-to-quarter comparison, Hong Kong grew slightly by 0.2% in the fourth quarter after GDP rebounded by 2.7% in the third quarter of last year. However, year-on-year data shows that Hong Kong’s GDP still fell by 3.0% in the fourth quarter of last year, slightly better than the 3.6% decline in the third quarter.

The press release stated that since Hong Kong society has returned to stability, the severe economic contraction last year was mainly due to the impact of the COVID-19 disease. Industries related to consumption and tourism, such as accommodation, catering services, and retail, have been hit hard by the epidemic, and their contractions have far exceeded the overall economy.

In contrast, financial market activities have remained vigorous, and activities related to the import and export of goods have also accelerated significantly recently. Therefore, for Hong Kong to achieve full economic recovery, it is essential that the epidemic be controlled as soon as possible.

The Hong Kong government expects that the Hong Kong economy will resume positive growth throughout the year, but the first half of the year will still be challenging. The extent and speed of the recovery are affected by a number of uncertainties, especially the uncertainty related to the epidemic.

In addition, the mainland’s economy will further strengthen and it is expected to provide support for Hong Kong’s exports, but the pace of recovery of other major economies will depend on the success of the local mass vaccination program.

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