Hong Kong GDP growth tipped to fall to 1% for 2022
HONG KONG - The global financial services group, Natixis, is predicting just 1% growth for Hong Kong in calendar 2022. With surging COVID cases, Hong Kong's economy fell 4% YoY in Q1 2022, with pressure mounting across consumption, investment and foreign trade as COVID cases held up.
Due to the fast-spreading nature of Omicron, harsh social-distancing measures were implemented from January 2022, with an immediate and wide impact on various industries and the economy, Natixis says.
"Mobility for retail and recreation collapsed to 55% of the pre-pandemic level in March 2022, dampening consumer sentiment. The purchasing managers' index (PMI) fell to 42 for the same period, showing businesses were hesitating in expansion.
"The most obvious impact on the economy was shown in retail sales, which fell 15% YoY in February 2022. It was the worst decline since August 2020.
"Aside from the fall in domestic trade, a possibly unintended consequence was on foreign trade. With stringent border controls, trade moved away from Hong Kong to other hubs.
"Even though Mainland China's lockdowns could drag demand, its trade with Hong Kong fell 16% YoY but grew 12% YoY with other major Asian markets (an average of Japan, Singapore, South Korea and Taiwan) in March 2022. This shows trades have rerouted away from Hong Kong."