Hong Kong GDP up 7.5% in Q2 as post recession recovery continues

HONG KONG: Hong Kong's economy is continuing to recover, advanced figures showed Friday, albeit at a slightly slower than expected pace with little sign that the international finance hub's coronavirus pandemic isolation will end any time soon.

Gross-domestic product rose 7.5 percent from a year earlier in the second quarter according to data released by the government.

That compares to a revised 8 percent growth in the previous quarter and is below a median estimate of 7.8 percent by a Bloomberg survey of economists.

On a quarter-on-quarter basis, GDP shrank one percent compared with Bloomberg's forecast contraction of 0.8 percent.

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Hong Kong entered the coronavirus pandemic in the midst of a deep recession, battered by the US-China trade war and then several months of social unrest in 2019.

It emerged from six consecutive quarters of negative growth at the start of the year, finally ending a more prolonged downturn than during both the 1997 Asian financial crisis and the 2007-08 global crash.

The city has kept coronavirus infections low by effectively closing itself off to tourists and imposing strict social distancing and quarantine rules for any locals or business figures coming to the city.

The measures have kept the disease largely at bay but imposed an economic cost, especially on the travel and retail sectors with the city shuttered to the outside world -- and mainland China -- for the last 17 months.

Vaccination take-up has been slow, hampered by lingering distrust of the government as Beijing cracks down on dissent in response to 2019's protests.

Despite securing ample supplies to vaccinate everyone, only 46 percent of Hong Kongers have received one or more shots.

Authorities are currently distributing electronic vouchers worth HK$5,000 ($640) to all adult permanent residents in the hopes that the spending will further stimulate the economy.

Finance secretary Paul Chan has estimated the HK$36 billion scheme could add 0.7 percent to this year's GDP figures.