Hong Kong’s economy to contract further as the government missed the boat for fiscal stimulus
- Approaching the end of a volatile year, Hong Kong continues to face its triple whammy of the slower growth in mainland China, the trade war uncertainty and the social unrest. While the former two external risks are not in the hands of Hong Kong and subjected to global development, the escalated social unrest and the lack of fiscal stimulus are bringing higher downside risk to economic growth.
- The current dilemma means it is hard to foresee a quick fix for the unrest. As such, the outlook for the most affected sectors, such as retail and tourism, will continue to be challenging. The ripple effect from lower consumption and productivity may eventually result in a higher unemployment rate. The worsened sentiment also means firms may adopt a wait-and-see approach on investment, putting stress on business activities and fueling the vicious growth cycle.
- More importantly, the Hong Kong government has missed the boat on fiscal stimulus to provide the much-needed support to the economy. The stimulus announced so far only accounts for 0.7% of GDP, which is highly disproportionate to the current difficult time. The vanished hope in solid support to help the impacted sectors and restore consumer and business confidence from fiscal measures could lower growth prospect.
- The higher uncertainties and economic challenges may be reflected in asset prices, such as the recent poor performance of Hang Seng Index with a renewed jump in its volatility Index. The divergence of the volatility Index in Hong Kong and the US shows the correction is mainly driven by domestic factors rather than global sentiment, which could trigger a negative wealth effect.
- To this end, we expect Hong Kong’s economic growth to contract by 1%- 2% in 2019 and even 2%-3% in 2020 if the domestic dilemma persists without meaningful fiscal stimulus.
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Aktivis Mahasiswa
5 年Semoga sukses
InsightSupport. Org 釋賢業/生活
5 年歷史悠久的港口城市有趣的頭銜！也許香港政府正在努力走中間路，避免過度獎勵鼓動者並同時疏遠生命線？ “為此，我們預計香港的經濟增長將在2019年萎縮1％-2％，到2020年甚至萎縮2％-3％。” 如果2018年的實際GDP為3％（https://knoema.com/atlas/Hong-Kong/Real-GDP-growth），那麼即使是最糟糕的情況，即3％的收縮率也可能會支持反彈。 香港政府應為包括人文學科在內的大學提供安全的刺激措施：讓學生走上街頭，從事生產性工作，發展區域文化旅遊（需要保存與破壞物質遺產），有機永續文化以及常規技術，金融等。投資教授，博士後，研究生獎學金和本科生獎學金以進行有用，相關和富有成效的R + D的大學和學院將是確保經濟至少適度發展同時實現多元化的安全的“中間方法”多個部門之間存在風險，從而擺脫了歷史悠久的PE (私人產權) 生態英雄！ #繁榮和諧4香港 （對不起，在線翻譯）
InsightSupport. Org 釋賢業/生活
5 年Interesting title for a historical port city!?Perhaps HK Gov is trying to walk the middle way, to avoid excessively rewarding agitators and alienating life-blood at the same time?? "To this end, we expect Hong Kong’s economic growth to contract by 1%- 2% in 2019 and even 2%-3% in 2020." If real GDP for 2018 was 3% (https://knoema.com/atlas/Hong-Kong/Real-GDP-growth) then even the worst case scenario of a 3% shrinkage could support a rebound. HK Gov should provide safe stimulus to the universities, including humanities: get the students off the streets and into productive work developing regional cultural tourism (which requires preserving vs destroying material heritage), organic permaculture, plus usual tech, finance, etc. Loading up the universities and colleges with investment in professorships, post-docs, grad student fellowships, and undergrad awards to do useful, relevant, and productive R+D would be a safe "middle way" approach to keeping the economy going at least modestly while diversifying risks among multiple sectors, thereby getting weaned off the historical PE eco-heroin!? #Prosperity4HK