HK economy limps into next year with fate tied to protests

Bloomberg

Hong Kong’s economy ends the year wounded, with the chances for stabilisation in 2020 hanging on whether future protests are peaceful or lapse back into violence.
Economists forecast a 1.3% contraction for 2019 and predict year-on-year declines will continue in the first two quarters of 2020.
Yet the unrest has tapered in recent weeks after an electoral win for pro-democracy parties in November, and there’s a chance that the contractions in visitor numbers and retail sales will ease up on a month-to-month basis. Businesses and households can look to the government’s annual budget early next year as a potential source of fresh stimulus and structural support for the economy.
Also, the preliminary trade deal reached between the US and China could ease economic pressures for Hong Kong.
Here is a snapshot of the economic pain Hong Kong’s economy has weathered since last spring, from the political unrest as well as the effects of the trade war.
Hong Kong’s economic momentum has evaporated since the start of protests in June, with the city in the third quarter entering its first recession in a decade. The government forecasts an annual contraction of 1.3% amid the protests and as the US-China trade woes take a toll on exports.
The labour market has begun losing its resilience, with overall unemployment rising to 3.2% as of the end of November after spending much of the past year at a two-decade low. The jobless rate for the food and beverage sector hit the highest level in more than eight years. Many businesses have cut hours or required staff to take unpaid leave to stave off layoffs.
The economic impact of the unrest has been illustrated most dramatically in the retail and tourism industries with many businesses hanging on by a thread. More than 5,600 retail jobs could be lost and thousands of stores shuttered in the next six months unless conditions improve.