Hong Kong leader Carrie Lam expects city to record negative growth in 2019

Hong Kong Chief Executive Carrie Lam was speaking two days after Financial Secretary Paul Chan said Hong Kong has fallen into recession and was unlikely to achieve any growth this year.
Hong Kong Chief Executive Carrie Lam was speaking two days after Financial Secretary Paul Chan said Hong Kong has fallen into recession and was unlikely to achieve any growth this year.PHOTO: REUTERS

HONG KONG (REUTERS) - Hong Kong's embattled leader Carrie Lam said on Tuesday (Oct 29) she expects the Asian financial hub to record negative economic growth for the full 2019 year, as the city grapples with five months of often violent anti-government protests.

Mrs Lam was speaking two days after Financial Secretary Paul Chan said Hong Kong has fallen into recession and was unlikely to achieve any growth this year.

“Our current assessment is that the full year of 2019 will likely show negative growth, which means we won’t be able to achieve the already revised-down positive growth of 0-1 per cent,” Mrs Lam said. “The situation is very grim”.

Mr Chan had said in a blog post the impact from the protests to Hong Kong's economy would be comprehensive, adding that a preliminary estimate for third-quarter GDP on Thursday would show two successive quarters of contraction - the technical definition of a recession.

He also said it would be "extremely difficult" to achieve the government's pre-protest forecast of 0-1 per cent annual economic growth.

The protests, which have evolved into calls for greater democracy, escalated in June, plunging the city into its biggest political crisis in decades and posing the gravest popular challenge to Chinese leader Xi Jinping since he came to power. 

Beijing-backed Lam said the government would announce fresh measures to boost the economy once unrest in the Chinese-ruled city settles. She did not elaborate. 

The government last week announced relief measures of HK$2 billion (S$347.7 million) following a HK$19.1 billion package in August to support the economy.

On Sunday, black-clad and masked demonstrators set fire to shops and hurled petrol bombs at police following a now-familiar pattern of protests, which show no sign of letting up.

Mrs Lam said the central government in Beijing was confident her administration could return the city to normal and had been supporting her in upholding law and order.  

Protesters are angry about what they view as increasing interference by Beijing in Hong Kong, which returned to Chinese rule in 1997 under a “one country, two systems” formula intended to guarantee freedoms not seen on the mainland.  

China denies meddling. It has accused foreign governments, including the United States and Britain, of stirring up trouble. 

Tourist numbers have plummeted, with visitor numbers down nearly 50 per cent in October, record declines in retail sales, rising unemployment and bankruptcies.