Policy Address
V. Economic Development
43. As a result of the intensifying trade tension between the Mainland and the United States, global economic growth has slowed noticeably since late 2018. The economic outlook of the Mainland and the region has also been adversely affected. In the first half of 2019, the Hong Kong economy grew modestly by 0.5% year-on-year, the worst performance since the 2009 recession. Violent acts in recent months have aggravated the situation, posing an unprecedented challenge to our economy. Since July this year, there have been sharp reductions in visitor arrivals and retail sales, a continued decline in exports as well as deeply dampened business, investment and consumption sentiments. Certain industries have recorded the worst business performance ever. We consider that the Hong Kong economy has already slipped into a technical recession since the third quarter. In mid-August, the Government lowered the economic growth forecast for 2019 to 0 – 1%.
44. The impact of the economic downturn on the labour market has surfaced gradually. The unemployment rates of the more affected sectors such as retail, accommodation and catering services have been rising progressively, while labour demand in the import/export trade sector has weakened considerably. The local labour market will face increasing pressure of layoffs in the near term.
45. We are very concerned about the pressure borne by small and medium-sized enterprises (SMEs) and members of the public amid an economic downturn. Apart from implementing the package of support measures announced in the past two months as soon as possible, we will keep in view of the situation and, when necessary, introduce other measures to help enterprises and the public tide over difficult times.
