Omicron: tough social-distancing measures could hammer Hong Kong economy as experts predict slowdown in growth
- Economists estimate growth levels of 1 to 2 per cent in first quarter but say recovery will depend on duration of business restrictions
- Catering and retail industry representatives warn of wave of business closures amid Lunar New Year shutdown
The forecast followed the city’s battle against an escalating outbreak of the highly contagious Omicron variant, with daily infections hitting more than 100 cases this week – the highest in 18 months.
Authorities temporarily closed 15 categories of businesses and set a 6pm curfew for dine-in service at restaurants as part of tightened restrictions since January 7.
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Hong Kong reports 140 new human cases of Covid-19 and one from a surrendered hamster
The strict measures saw several economists predict growth levels of 1 to 2 per cent at best or a 1 per cent contraction at worst for the first quarter, but noted that recovery would depend on how long the government maintained restrictions on businesses.
Simon Lee Siu-po, an honorary institute fellow at the Asia Pacific Institute of Business at Chinese University, estimated the city’s gross domestic product growth for the first quarter could be 2 per cent, compared to 7.9 per cent during the same period last year.
“Given the impact of the Omicron outbreak, I predict that the economic growth will slow down to 2 per cent this quarter. The economy grew at a fast pace last year and there is not much room for rapid growth,” he said.