Fashion
Hong Kong’s economic growth is expected to slow in the third quarter from the second, with weak exports, sluggish retail sales and falling tourist arrivals, continuing to take a toll on the Asian financial centre.
The once vibrant city is also grappling with a slowdown in China, while its outlook has been hurt by rising tensions with Beijing that could threaten stability and impede policymaking.
The economy was expected to grow 0.3 percent for the third quarter from the second, according to the median estimate of economists in a Reuters poll. From a year earlier, growth was forecast at 1.6 percent.
The government is due to release gross domestic product data on Friday at 0830 GMT.
Gross domestic product grew a seasonally-adjusted 1.6 percent in the second quarter from the first, and 1.7 percent from a year earlier, the government said in August.
Hong Kong’s retail sales fell for the 19th straight month in September as China’s economic slowdown and a strong local currency crimped business activity and tourism.
“We think retail sales and tourism have not yet recovered. There are still downside risks,” said Young Sun Kwon, a Hong Kong-based economist at Nomura.
Another potential risk is the impact of cooling measures imposed by the government this month to rein in property prices, which are among the most expensive in the world.
The government said it would raise stamp duties on home purchases to 15 percent, across the board, effective Nov. 5.
Economists said it was still too early to tell how effective the measures would be as there were other factors involved, such as the U.S. presidential election and China’s economic performance.
Hong Kong, once the busiest port in the world, is also heavily dependent on trade, and its exports and imports are predominantly re-exports to and from mainland China.
The Trade Development Council has cut its forecast for the city’s exports this year from flat to a 4 percent decline.
Slower economic growth could pile further pressure on Hong Kong leader Leung Chun-ying ahead of an election next year and amid rising tensions with the central government in China over concerns of increased meddling by Beijing in the city’s affairs.
The former British colony’s economy is now more vulnerable as it struggles with weaker retail sales and a slump in cash-rich mainland Chinese streaming across the border on shopping sprees.
