Hong Kong Entered Recession in Last Quarter, Most Accurate Forecaster Says
By Sophie Leung and Richard Frost - Nov 7, 2011
Hong Kong’s economy, a barometer of global growth, probably sank into recession with a contraction in the third quarter, according to Daiwa Capital Markets Ltd. and Australia & New Zealand Banking Group Ltd.
Gross domestic product shrank 1.5 percent from the previous quarter, seasonally adjusted, said Kevin Lai, a Hong Kong-based economist at Daiwa. The report is due Nov. 11. Lai came closest in a Bloomberg News survey to predicting the 0.5 percent contraction in the second quarter.
Hong Kong’s exports declined in September for the first time in almost two years, and the benchmark Hang Seng Index plunged 21 percent in the third quarter, the biggest loss since 2001, as Europe's debt crisis roiled global markets. Donald Tsang, the city's chief executive, warned yesterday in New York that there’s a 50 percent chance of a world recession in the coming year.
“The economy is faltering on a rapidly deteriorating external environment,” said Raymond Yeung, an economist at ANZ in Hong Kong. Hong Kong is “the nerve center of regional economic activities” and “any degeneration may signal a global economic downturn,” Yeung said.
Analysts in a Bloomberg News survey are split on whether the economy contracted in the latest quarter, meeting the technical definition of a recession. Seven out of 15 forecast a gain in GDP, seven predict a fall and one sees no change.
bloomberg.com |
