Hong Kong’s growth in 2020 is expected to come in at -0.2 percent, with the lingering of domestic tensions and the effects of the COVID-19 outbreak. The US-China trade conflict has impacted growth in the ASEAN+3 region; Hong Kong – as a trade hub – has not been spared.
Meanwhile, the city’s economy and financial system remain resilient. Its solid macroeconomic fundamentals, sound financial system, ample fiscal reserves and good governance have anchored macroeconomic and financial stability despite a sharp slowdown in growth. These strengths will support the authorities’ efforts to address both near-term risks and long-term challenges ahead.
AMRO recommends that measures be taken to mitigate the impact of near-term uncertainties while pressing on with efforts to address structural challenges and socioeconomic inequality. The authorities should consider enhancing fiscal and other measures to support firms and workers. Policy measures to diversify the economy, spur technology development, keep the labor market flexible, and to strengthen social welfare and healthcare support are welcome. For the property market, the authorities should continue to step up efforts to increase the supply of land and provision of housing, especially affordable housing for lower-income groups.
Besides elaborating on the economic outlook, risks and vulnerabilities, as well as policy recommendations for Hong Kong, this report ALSO delves into (1) ongoing efforts to manage Hong Kong’s real estate sector, and (2) how Hong Kong can contribute and benefit from the Greater Bay Area Development.