Hong Kong economic growth likely contracted in Q3 2019, retail sales to have dropped further in September

Hong Kong economic growth data for the third quarter is scheduled to release tomorrow. According to a DBS Bank research report, the Hong Kong economy is likely to have entered a technical recession, with the GDP growth contracting 1 percent year-on-year.

On the external front, exports growth remained negative for 11 straight months in the midst of various external headwinds. The U.S.-China trade tensions, global economic deceleration, as well as Brexit will continue to restrain the re-export performance.

Exports of professional and financial services might have taken a hard impact as well. In the meantime, domestic sector has softened further. Retail sales is likely to have dropped 25 percent in September from August’s fall of 23 percent. In the midst of a social unrest and a falling CNY currency, visitor arrivals fell 39.1 percent in August.

“Local consumption sentiment was also subdued due to a volatile equity market. With the rising food price due to the widespread swine fever in Mainland China, the risk of stagflation is rising”, added DBS Bank.