Real prospect of 'technical recession' in HK, says EIU

Local | 10 Aug 2018 9:22 pm

Hong Kong's economy has cooled sharply after the strong growth seen in the first quarter, with both household spending and exports falling in quarter on quarter terms, says Duncan Innes-Ker, Regional Director, Asia at The Economist Intelligence Unit.

"This was unexpected: trade data and retail sales had suggested a fairly robust level of activity,'' he said.

"With US-China trade tensions likely to serve as a drag on export growth in the second half of the year, there is even a very real prospect that Hong Kong could experience a technical recession if seasonally adjusted output continues to fall in the third quarter.

"Rising interest rates are also likely to have a depressing impact on housing prices towards the end of this year, which will dampen consumer sentiment and could slow spending on construction.

Having said that, The EIU still expects the economy to expand by 3.4 percent over 2018 as a whole, which will represent a pretty impressive performance.”

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