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Friday, 14 November 2008

Hong Kong in recession

HONG KONG - HONG KONG slipped into recession in the third quarter as the global economic slowdown took its toll on the financial hub, government figures showed on Friday.

Hong Kong's gross domestic product fell 0.5 per cent from the previous quarter on a seasonally adjusted basis, following a fall of 1.4 per cent in the second quarter, the Census and Statistics Department said in a statement.

'The growth of the Hong Kong economy slowed notably further in the third quarter, as the external sector slackened amid the faltering global demand,' said government economist Helen Chan, in the statement.

'And as domestic demand towards the end of the quarter was severely hit by the outbreak of the global financial tsunami that caused significant jitters in the local asset markets.'

The standard definition for recession is two consecutive quarters of falling GDP.

The announcement means Hong Kong now joins Singapore, Germany, New Zealand and Italy in reporting a technical recession as the global slowdown bites into economies across the world.

Hong Kong cut its full-year 2008 GDP forecast to between 3 and 3.5 per cent from the previous 4 and 5 per cent, but kept its forecast for inflation at 4.2 per cent for the full year. Last year, Hong Kong's economy grew 6.4 per cent. -- AFP

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