(Bloomberg) -- Hong Kong's leader said the Asian financial hub's economy will probably be submerged in a slump for a “long time,” joining the growing chorus of warnings that the fallout from the coronavirus and resurgence of anti-Beijing protests will hobble the city's businesses for the foreseeable future.
“Even if the virus eases slightly, I believe Hong Kong's economy will be deep in recession for a rather long time,” Chief Executive Carrie Lam said during a Friday briefing.
The comments came shortly after the government confirmed its economy in the first quarter contracted by a record 8.9% from a year ago. It was the worst reading in four decades of data.
Hong Kong's Economic Crisis Just Keeps Getting Worse
While Hong Kong emerges from restrictions to control the coronavirus outbreak, residents and businesses are bracing for continued economic distress from renewed political protests. Months of unrest that preceded the pandemic pushed Hong Kong into a recession in the second half of last year.
Financial Secretary Paul Chan has described Hong Kong's economic challenges as unprecedented, forecasting an annual decline in growth of as much as 7%, the worst on record after the economy contracted 1.2% in 2019.
“While our economy is able to earn some breathing space as the pandemic subsided, social incidents are bouncing back and posing threat to the economic recovery,” Chan said in a May 10 blog post. “The outlook for Hong Kong's Q2 economic performance is still gloomy.”
Chan expressed optimism the economy will show signs of improvement in the third quarter as the government continues to roll out about HK$287.5 billion ($37 billion) in relief measures announced this year, including a HK$10,000 cash handout to permanent residents age 18 and above.
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