Hong Kong GDP up 7.5pc in Q2 as post-recession recovery continues

HONG KONG (AFP) – Hong Kong’s economy is continuing to recover, advanced figures showed on Friday, albeit at a slightly slower than expected pace with little sign that the international finance hub’s coronavirus pandemic isolation will end any time soon.

Gross domestic product (GDP) rose 7.5 per cent from a year earlier in the second quarter according to data released by the government. That compares to a revised eight-per-cent growth in the previous quarter and is below a median estimate of 7.8 per cent by a Bloomberg survey of economists.

On a quarter-on-quarter basis, GDP shrank one per cent compared with Bloomberg’s forecast contraction of 0.8 per cent.

Hong Kong entered the coronavirus pandemic in the midst of a deep recession, battered by the United States (US)-China trade war and then several months of social unrest in 2019.

It emerged from six consecutive quarters of negative growth at the start of the year, finally ending a more prolonged downturn than during both the 1997 Asian financial crisis and the 2007-08 global crash.

Gantry cranes loading cargos onto the container ship at a port of Kwai Tsing Container Terminals in Hong Kong. PHOTO: AP

The city has kept coronavirus infections low by effectively closing itself off to tourists and imposing strict social distancing and quarantine rules for any locals or business figures coming to the city.

The measures have kept the disease largely at bay but imposed an economic cost, especially on the travel and retail sectors with the city shuttered to the outside world – and mainland China – for the last 17 months.

Vaccination take-up has been slow, hampered by lingering distrust of the government as Beijing cracks down on dissent in response to 2019’s protests.

Despite securing ample supplies to vaccinate everyone, only 46 per cent of Hong Kongers have received one or more shots.

Authorities are currently distributing electronic vouchers worth HKD5,000 to all adult permanent residents in the hopes that the spending will further stimulate the economy.

Finance Secretary Paul Chan has estimated the HKD36 billion scheme could add 0.7 per cent to this year’s GDP figures.