Hong Kong SAR Chartbook: Impact of Zero-COVID Policy
- Growth slowed from 5.4%YoY in 3Q to 4.8% in 4Q. Annual growth was 6.4%
- Yet, downside risks emerged as the city is in lockdown again
- The border with Mainland China and rest of the world is unlikely to be re-opened in 1H22
- We see downside risks to our 2022 GDP (2.4%) and property price (0%) forecasts
- Growth slowed from 5.4%YoY in 3Q to 4.8% in 4Q. Annual growth was 6.4%. Under a largely stable COVID situation, Hong Kong SAR’s GDP level returned to the pre-pandemic level.
- Yet, downside risks emerged as the city is in lockdown again. Daily new cases reached triple-digit and the government continued to maintain Zero-COVID policy. Extensive flight bans remain, although for those who can enter, the quarantine period is now cut from 21 days to 14 days.
- The border with with Mainland China and rest of the world is unlikely to be re-opened in 1H22. The timing of re-opening of border hinge on herd immunity with booster shots and the promotion of the Health Code System.
- Domestic consumption and external trade outlook are subdued. Interest rate will rise amid both Fed Fund Rate hike cycle and the return of fiscal stimulus. Structurally, the shrinking labour force is an ever-strengthening headwind.
- We see downside risks to our 2022 GDP (2.4%) and property price (0%) forecasts.
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