HONG Kong’s economy shrank in the first quarter of the year as the city imposed its most stringent restrictions to curb an outbreak of Covid-19 that has battered business, led to an exodus of people and overshadowed the outlook for growth.
The city’s GDP contracted 4 per cent in the first quarter from a year earlier, breaking four quarters of growth, amid weak performance in both domestic and external demand, the government said, according to Reuters.
That compares with revised growth of 4.7 per cent in the fourth quarter and forecasts for a 1.2 per cent decline by DBS and 1.3 per cent drop by Standard Chartered for the first quarter.
‘The global economy will continue to face significant challenges in the near term’, a government spokesman said in a statement, adding that improving the local epidemic situation and government support measures should help lift domestic demand for the remainder of the year.
On a quarterly basis, the economy shrank by a seasonally adjusted 2.9 per cent in January-March.
Hong Kong’s economy is expected to grow 2.0 per cent to 3.5 per cent this year after expanding 6.4 per cent in 2021, with underlying inflation at 2 per cent.
