The Hong Kong government has planned to release data regarding the present condition of the city economy to update to knowledge base of all residents, hoteliers, and retailers.
The market has undergone a 0.4 percent contraction during the second quarter and now by the third quarter, the gross domestic product figures are expected to fall by 0.6 percent. These two repeated falls reveal that Hong Kong economy is now suffering from technical recession. This kind of financial crisis in the Hong Kong market was observed decades ago.
Economists these days are making discussions regarding how long this recession will sustain. If we consider the US-China trade war and a few other factors causing direct negative impact on the market, chances are that this contraction will last for around a year.
Senior economist, Mr. Tommy Wu, recently said that if the protests come to an end, it is possible to see immediate bounce back in the economy. However, the expected fall is of 0.1 percent for the year 2019. He also added that even if the fall is restored, the tourism-related sectors will still take a longer time to recover.
The economy in the city started suffering more with the initial impact of protests in this summer season. The sales went down when tourists stopped visiting the area. It has posed real harm to the sentiments of small businesses; however, the purchasing managers also maintained week performance. Furthermore, the financial services and the real estate sectors have also stayed resilient during this tenure.
MSCI Hong Kong Index went down by 18% after touching a high value in the month of April. However, it gained some value by October end once again. At an average, the index for financial markets appeared positive this year. But on the other side, the prices for property went down by 5.5%. Furthermore, the Centaline Property Centa-City Leading Index is observed to go high in this year; even after the considerable lows earlier in the month of February.
The largest and most renowned lender in the financial hub, HSBC Holdings, revealed an estimated fall of 12 percent in the adjusted pretax profit; the value touched the range of US $5.3 billion by the third quarter this year. If we talk about the Hong Kong operation only, the adjusted pretax profit moved up by 1 percent in this quarter and it touched the maximum value of US $3 billion.
The Monetary Authority of the city has worked hard to maintain stability in the financial market. Deputy Director of the research department of International Monetary Fund, Mr. Jonathan Ostry, said that the Hong Kong dollar’s peg has successfully survived for several decades and it has always played an essential role in the city economy.
After observing the economy and the steep falls in various sectors, the government has announced some relief packages for the year. Experts are still hoping that the Hong Kong economy will bounce back with some positive stats in the near future.
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