HKGCC further cuts economic forecast for 2022

The Hong Kong General Chamber of Commerce (HKGCC) cut its 2022 economic forecast by a further 0.5%, down from its February estimate of 1.2%. More than two and a half years of COVID-19 restrictions are weighing heavily on businesses and the economy, exacerbated by persistent supply chain bottlenecks and the war in Ukraine.

House CEO George Leung said the conflict in Ukraine and growing geopolitical tensions have fueled global inflation, leading the Federal Reserve and other central banks to aggressively raise interest rates. The resulting pressure on consumer purchasing power, both domestically and in global markets, could have disastrous consequences for business confidence and willingness to invest.

“The continued closure of the border between Hong Kong and mainland China, as well as the rest of the world, is hampering investment decisions and stifling any prospect of economic recovery. We need a concrete timetable for reopening Hong Kong to ensure that we can continue to attract talent to the city and companies to invest here,” Leung said.

According to preliminary data released by the Census and Statistics Department on August 1, 2022, Hong Kong’s economy shrank 1.4 percent in the second quarter of 2022, compared to the same period last year. The continued impact of the fifth wave of coronavirus has dragged the city into a recession, .

Preliminary estimates also showed Hong Kong’s domestic product (GDP) growth fell 1.4% in real terms in the second quarter of 2022 from a year earlier, compared to a 3.9% drop in the first. trimester. The decline of GDP mainly attributable to the weak performance of foreign trade during the quarter. A recession is defined as a contraction in GDP for two or more successive quarters. The last time Hong Kong fell into recession was in 2020 during the initial stages of the Covid-19 pandemic.

Looking ahead, the deteriorating global economic outlook will continue to weigh on Hong Kong’s export performance for the rest of the year, with high inflation in advanced economies amid supply disruptions and tensions. persistent in Ukraine. Intensified monetary policy tightening by many major central banks in response is expected to significantly dampen economic growth, a government spokesman said.

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