Hong Kong’s gross domestic product in the fourth quarter of 2020 shrank by a less-than-expected 3% year on year, the government reported on Wednesday, providing some an economic rebound could sprout in 2021 as COVID-19 vaccinations get underway.
While far from business as usual, the latest GDP figures are an improvement over the 3.6% year on year decline recorded in the third quarter.
The latest figures also surpasses expectations; in the fall, the Institute of Economics and Business Strategy at the University of Hong Kong predicted a 4.5% contraction in the fourth quarter.
Hong Kong’s economy contracted by 6.1% in 2020, wider compared to a slip of 1.2% the previous year, according to government data.
Financial secretary Paul Chan forecast economic expansion in 2021 with growth between 3.5 and 5.5% this year.
“With the epidemic still lingering, our economy has yet to come out of recession,” he said in his 2021-22 budget address.
Chan expects a HK$101.6 billion deficit for the next financial year, which will account for 3.6% of the GDP.
Government consumption expenditure increased by 5.6% in the fourth quarter of 2020 compared with a year earlier, down from 7.1% the quarter prior.