Hong Kong's economy has fallen short of China's hopes as tourists stay away

Before a series of Covid lockdowns were implemented in Hong Kong, pro-democracy protests rocked the city. Credit: Vincent Yu/AP

Exports Mainland China, the US, Europe and much of the rest of Asia have all fallen, according to official statistics, with a government spokesman warning that trade “will continue to face strong pressure as the slowdown in global economic growth weighs on external demand. p>

Hong Kong's economy grew 1.5 percent year-over-year, driven in large part by local demand.

Private consumption rose 8.5 percent year-on-year, but government consumption fell nearly on 10 %. .

Exports of goods in the second quarter decreased by more than 15% compared to the same period last year, although sales of services increased by more than one-fifth.

Consumer price inflation eased to 1.9% in June and unemployment fell from 3% to 2.9% in the three months to June.

Officers hope a resurgence of the pandemic, which began in China late last year, as a result of the sudden lifting of previously strict measures, will give more economic recovery in the coming months as normal travel resumes.

“Inbound tourism and private consumption will remain the main drivers of economic growth until the end of the year. As transport and handling capacity continue to recover, visitor arrivals should increase further,” the spokesperson said.

However, Sheana Yue of Capital Economics expressed caution and lowered its growth forecast for the year from 6 .5% to 5.5%. .

She said: “Goods exports are unlikely to change any time soon – foreign demand will remain weak until the global picture improves next year.

“And as interest rates remain high until the second half of next year, investment will remain low.

“But there is still room for further recovery in the coming months. . The overall influx of foreigners continued to grow steadily and at the end of July reached 60% of the pre-protest level.

Most of the increase in July was due to an increase in the number of arrivals from the mainland. And the difficulty of restoring capacity in travel-related sectors should ease as policies to attract workers pay off.”