“From what we see now, I would not rule out such a possibility,” he said. “It would show that the momentum behind our economic growth has slowed down quite quickly. We estimate that the growth rate for 2018 will be around 3 per cent, on the lower end of our projection when we rolled out our last budget [in February last year].”

In his next budget address on February 27, Chan will pledge to place emphasis on supporting businesses, employment and people’s livelihoods.

The growth rates for the first three quarters of last year were 4.6 per cent, 3.5 per cent and 2.8 per cent respectively.

Chan said the numbers showed an obvious trend of economic slowdown.

“The impact of the US-China trade war has started to emerge … and it was almost zero growth for commodities exports in the last quarter. This was a sharp drop from the 6 per cent average growth in the first three quarters,” he wrote.

“Consumption was also affected – retail volume only grew by 2.1 per cent in the fourth quarter, much lower than the 12 per cent growth in the first half of the year.”

The last time Hong Kong’s economic growth rate dropped below 3 per cent was in 2013, when the city recorded 2.9 per cent growth. From 2012 to 2016, Hong Kong’s GDP growth rates ranged from 1.4 to 2.9 per cent.

Business sector lawmakers and experts on Sunday urged Chan to roll out measures to help Hong Kong’s small- and medium-sized enterprises (SMEs) and residents deal with the economic slowdown.

US-China trade war a ‘dark cloud’ over Hong Kong economic growth

Economist Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, called on Chan to be generous with his relief measures.

“Hong Kong’s economy depends a lot on consumption … Chan should consider waiving people’s rates, electricity bills and salaries tax, as well as increasing their tax allowances,” he said.

Kwan urged Chan to also help companies borrow money, as banks could tighten lending amid unfavourable and uncertain economic conditions.

Under a special lending scheme launched from 2008 to 2010, the government has provided 80 per cent guaranteed coverage to 30 banks so they can lend to SMEs without sufficient assets to secure loans.

The maximum amount each enterprise can borrow is HK$12 million.

Kwan and industrial sector lawmaker Jimmy Ng Wing-ka, vice-chairman of the Business and Professionals Alliance, agreed that it was time for the government to relaunch the scheme.

Liberal Party lawmaker Peter Shiu Ka-fai, who represents the wholesale and retail sectors in the legislature, proposed that business registration and various licence fees should be waived this year.

“Chan should also consider giving out consumer vouchers to encourage residents to shop,” he added.

The finance minister warned that Hong Kong this year would continue to be affected by the outcomes of trade negotiations between the US and China, as well as Britain’s exit from the European Union and other geopolitical factors.

“External uncertainties and variations were relatively large, so when we prepared the budget, our theme was to support businesses, protect employment, stabilise the economy and benefit people’s livelihoods,” he said.

Chan also noted that large corporations in Hong Kong were pessimistic about the economy this year.

He cited surveys conducted by the Census and Statistics Department indicating that most large companies expected the economy to worsen in the first quarter of this year, with only a minority optimistic about the situation improving.