KingSlayer Posted September 18, 2022 Posted September 18, 2022 BySarah Zheng and Cynthia Li August 2, 2022 at 3:54 AM GMT+1Updated onAugust 2, 2022 at 10:46 AM GMT+1 Economists downgraded their forecasts for Hong Kong's economy, predicting it could contract for the third time in four years, after data Monday showed growth is being weighed down by Covid restrictions and a slump in trade. Goldman Sachs Group Inc. expects gross domestic product to decline 0.5% in 2022, down from an earlier prediction of 0.3% growth. Bloomberg Economics now sees GDP shrinking 0.6% compared with a previous projection of 0.7% expansion. The downgrades follow Monday’s worse-than-expected data showing the economy contracted 1.4% in the second quarter from a year earlier. While some relief is expected for Hong Kong in the second half, the recovery is uncertain given the drag on demand and trade from Covid restrictions locally and in mainland China. Growth momentum is also coming under pressure as Hong Kong raises interest rates in line with the hawkish Federal Reserve to maintain the local dollar's peg to the US dollar. Separate data released Tuesday showed consumer spending remained under pressure. The value of retail sales fell 1.2% in June from a year ago, weaker than economists expected. Sale volumes dropped 4.1%, led by falls in purchases of clothing and electronics, government data showed. What Bloomberg Economics Says ... Hong Kong’s weaker-than-expected 2Q GDP results highlight the challenges still facing the economy: A quicker recovery requires further reopening, but rising Covid cases have complicated that. Slowing external demand and higher interest rates aren't helping either. Given the weakness of the 2Q numbers, we now see GDP shrinking 0.6% in 2022 -- worse than the 0.7% expansion we forecast earlier. -- Eric Zhu, economist https://www.bloomberg.com/news/terminal/RFYNRSDWRGG0 The economy shrank in 2019 when the city was engulfed by political protests, and in 2020 amid the outbreak of the pandemic. https://www.bloomberg.com/news/articles/2022-08-02/hong-kong-s-economy-seen-contracting-in-2022-as-gdp-disappoints?utm_medium=cpc_search&utm_campaign=NB_ENG_DSAXX_DSAXXXXXXXXXX_EVG_XXXX_XXX_Y0469_EN_EN_X_BLOM_GO_SE_XXX_XXXXXXXXXX&gclsrc=ds&gclsrc=ds
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