Hong Kong economy shrinks 4% under virus checks

HONG KONG-

Hong Kong’s economy shrank 4% from a year earlier in the quarter ending March after the Chinese territory closed restaurants and other businesses to tackle a spike in coronavirus infections.

Growth dipped from the 4% expansion in the previous quarter, government data showed on Tuesday. Goods exports fell 4.5% from a year earlier, while consumer spending fell 5.4%.

Hong Kong has closed amusement parks and imposed restrictions on restaurants and other businesses in response to an outbreak that has infected 1.2 million of its 7.4 million people.

The government eased restrictions in late April after the outbreak appeared to wane and ended a 2-year ban on non-resident visitors from traveling to the territory. But Hong Kong is facing pressure due to weak global trade and a lack of visitors from the Chinese mainland.

“While there are signs that activity is rebounding, we expect the recovery to be weak,” Capital Economics’ Sheana Yue said in a report.

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