The imports of goods also dropped 16.4 per cent year on year to HK$300 billion in January, with a visible trade deficit of HK$30.6 billion for the month.

Exports had already recorded their sharpest drop in a decade in 2019, down 4.1 per cent under the shadow of the US-China trade war.

Iris Pang, Greater China economist of ING Banking Asia, said January’s exports were hit by the combination of the trade war, the technology war, and the timing of the Lunar New Year.

“The worst is yet to come,” she said.

A government spokesman said merchandise exports registered a visible year-on-year decline last month, partly distorted by the difference in timing of the Lunar New Year, which fell in late January this year, but in early February last year.

“It would thus be more meaningful to analyse the trade figures for January and February combined, when available, for a clearer picture of the underlying situation, particularly the impact of the coronavirus infection in the region on external trade performance,” he said.

But he warned Hong Kong exports would be in for further chill from the coronavirus epidemic, which would deal a blow to the city’s trading activities.

“Of particular concern is the threat of the novel coronavirus infection, which will heavily weigh on regional production and trading activities,” he said. “Hong Kong’s merchandise exports will face a very austere external trading environment in the coming few months.”

Standard Chartered Bank said it lowered its GDP forecast for Hong Kong to a decline of 2.4 per cent from the previous decrease of 1.5 per cent, as the city’s economy would be further weakened by the epidemic.

“We believe the spread of the coronavirus in mainland China is already slowing and will come to a halt sometime in March; but we expect its impact on Hong Kong’s GDP to extend beyond a sharp drop in the first quarter, with a much slower recovery than was seen following the Sars epidemic in 2003,” the bank said.

The bank said the domestic economy was already in recession before the outbreak, leaving little cushion for households and businesses to weather another shock.

“This, along with the services-oriented nature of Hong Kong’s economy, suggests that it will benefit less than other Asian economies from a potentially swift normalisation of production in China. We see a U-shaped recovery due to weak underlying local demand,” it said.

The bank expressed worries for the rising unemployment rate, saying it was expected to reach 5 per cent from the current 3.4 per cent by year end.

Financial Secretary Paul Chan Mo-po is to reveal the 2019 GDP performance and his forecast on 2020 during his budget speech on Wednesday.