Hong Kong has fallen into recession, after being hit by more than five months of anti-government protests that show no signs of relenting, and is unlikely to achieve annual economic growth this year, the city’s financial secretary said.
“The blow to our economy is comprehensive,” Paul Chan said in a blog post on Sunday, adding that a preliminary estimate for third-quarter gross domestic product (GDP) on Thursday would show two successive quarters of contraction – the technical definition of a recession.
Chan also said that it would be “extremely difficult” to achieve the government’s pre-protest forecast of zero to one percent annual economic growth.
Businesses, especially in the tourism and retail sectors, have seen activity plunge since the protests began in June.
Protesters have routinely torched storefronts and businesses including banks, particularly those owned by mainland Chinese companies, and vandalised the city’s metro system as they view the company that runs it, MTR Corp, as acting at the government’s behest to curtail protests.
MTR has shut services early for the past few weeks and said it will close about two hours earlier than normal on Monday by 11 pm to repair damaged facilities.
Chan called the decline in tourists numbers an “emergency”, with the drop in visitor numbers worsening in October, down nearly 50 percent compared to the same month last year.
Retail operators, from prime shopping malls to mum-and-dad businesses, have been forced to shutter for multiple days over the past few months.
While authorities have announced measures to support small and medium-sized enterprises, Chan said the measures could only “slightly reduce the pressure”.
“Let citizens return to normal life, let industry and commerce to operate normally, and create more space for rational dialogue,” he wrote.
Protests in the former British colony have reached their 21st week. On Sunday, black-clad and masked demonstrators set fire to shops and hurled petrol bombs at police who responded with tear gas, water cannon and rubber bullets.
They are angry at what they view as increasing interference by Beijing in Hong Kong’s affairs, 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.