Photo: VCG

Hong Kong's gross domestic product (GDP) shrank by 2.9 percent year on year in the third quarter of 2019 as local social unrest triggered an abrupt deterioration in the economy, according to a preliminary government estimate released Thursday.

The decline marks the first year-on-year contraction for an individual quarter since the global financial crisis in 2009, much weaker than the mild growth of 0.6 percent and 0.4 percent in the first and second quarters respectively.

On a seasonally adjusted quarter-to-quarter comparison, Hong Kong's economy fell 3.2 percent in the third quarter, widening from a 0.5-percent drop in the preceding quarter.

The continued quarterly contraction indicated that the Hong Kong economy has entered a technical recession, a spokesman with the Hong Kong Special Administrative Region (HKSAR) government commented.

Analysed by major GDP component, private consumption expenditure decreased by 3.5 percent in real terms in the third quarter from a year earlier, recording its first year-on-year decline in more than 10 years.

Government consumption expenditure measured in national accounts terms grew by 5.3 percent in the third quarter over a year earlier, after the increase of 4.0 percent in the second quarter.

Gross domestic fixed capital formation decreased significantly by 16.3 percent in the third quarter from a year earlier, compared with the decrease of 10.8 percent in the second quarter.

Over the same period, total exports of goods measured in national accounts terms recorded a decrease of 7.0 percent from a year earlier, compared with the decrease of 5.4 percent in the second quarter. Imports of goods measured in national accounts terms fell by 11.1 percent in the third quarter, compared with the decline of 6.7 percent in the second quarter.

Exports of services dropped by 13.7 percent in the third quarter from a year earlier, following the decline of 1.1 percent in the second quarter. Imports of services decreased by 3.8 percent in the third quarter, as against the increase of 1.3 percent in the second quarter.

The HKSAR government attributed the weak performance to a slowing global economy and the ongoing unrest in the region that abruptly worsened economic conditions.

The spokesman cited surveys in recent months indicating that local business sentiment has turned very pessimistic.

The spokesman expects notable downward pressures on the Hong Kong economy in the rest of the year, estimating that the economy is very likely to record a negative growth for 2019 as a whole.