Hong Kong's gross domestic product (GDP) contracted sharply in the fourth quarter and for all of last year, according to data on Friday, as the city's economy weathered four fatal waves of the coronavirus pandemic that slammed tourism and hospitality.
Last year, the Hong Kong economy shrank 6.1% in the city's largest annual contraction to date, while also marking the first back-to-back yearly decline since the Census and Statistics Department started record-keeping in 1961. In the final quarter of last year the economy slipped more than 3%.
"As social stability in Hong Kong has been restored, the severe economic contraction last year was mainly due to the fallout from the COVID-19 pandemic," a spokesman for the government said in a statement.
Tourism and consumption focused businesses like catering and hotels were hardest hit, but buoyed by growing exports, the financial market remained strong he said. The Chinese territory came under a new National Security Law in July of last year aimed at halting protests over efforts by Beijing to exercise greater control.
But even though exports of goods recorded accelerated growth from mainland China, the export of services plunged further as inbound tourism remained "at a standstill," according to the spokesman.
The tourism industry is unlikely to rebound anytime soon, as Hong Kong's battle with a fourth wave of coronavirus infections has been ongoing since November with no end in sight. Restaurants no longer serve dinner, while bars, gyms and beauty salons have been shut entirely.
More than $40 billion was plowed into relief last year for ailing businesses, but the situation remains grim with many companies firing or furloughing staff. As a result, Hong Kong recorded a 6.6% unemployment rate in the fourth quarter of 2020, which is the highest in 16 years.
While Hong Kong faced a dismal year for the economy, Taiwan's GDP grew nearly 5% in the fourth quarter compared with the same period a year earlier according to data released by the national statistics agency on Friday.
As a whole, Taiwan's economy grew by 2.98% last year, the most of any major economy.
