The Hong Kong General Chamber of Commerce (HKGCC) has slashed its 2022 economic forecast to -0.5%, down from its February estimate of 1.2%.
More than two and a half years of Covid-19 restrictions are taking a heavy toll on businesses and the economy, exacerbated by ongoing supply chain bottlenecks and the war in Ukraine.
Chamber CEO George Leung said the conflict in Ukraine and growing geopolitical tensions have fueled global inflation, which has led the Federal Reserve and other central banks to aggressively raise interest rates. The resultant squeeze on consumers’ spending power, both domestically and in global markets, could have dire consequences on business confidence and their willingness to invest.
“The continued closure of the border between Hong Kong and Mainland China, as well as with the rest of the world, is impeding investment decisions and stifling any prospect of economic recovery. We need a concrete timetable to reopen Hong Kong to ensure we can continue to attract talent to the city and businesses to invest here,” said Leung.
|HKGCC Economic Forecasts||Latest Forecast||February Forecast||Change|
|Real GDP Growth||-0.5%||1.2%||-1.7pp|
|Unemployment Rate (year-end)||4.3%||4.8%||-0.5pp|
|Retail Sales Growth||-3%||-2%||-1pp|
|Merchandise Exports Growth||2%||6%||-4pp|