Social unrest gripping Hong Kong has affected the city’s economy and businesses, and the unemployment rate is likely to rise from current levels, Hong Kong Financial Secretary Paul Chan (陳茂波) said in a blog post.
In a Chinese-language post on his Web site, Chan said that many local retail and catering businesses had experienced a “sharp decline” in business and he warned that the longer the protests go on, the more pressure they will pile on small and medium-sized enterprises.
“For foreign tourists and enterprises, the unrest in Hong Kong dampens their appetite for traveling and investment,” Chan said in translated comments.
If the movement lasts, “everyone’s employment and livelihood will be at stake,” he wrote.
The Hong Kong government will consider countermeasures to stabilize the economy, Chan said, without providing details.
The overall economic downturn that Hong Kong is experiencing, including because of external factors such as the US-China trade dispute and frictions in the technology sector, will “inevitably be transmitted to the job market,” he wrote.
The jobless rate would likely rise from its current 20-year low of 2.8 percent, Chan wrote.
The import and export, wholesale and construction industries are among the most affected and their situations have begun to deteriorate, he wrote.
Over the past eight weeks, hundreds of thousands of people have demonstrated against proposed legislation that would make extraditions to mainland China easier. While the planned law has been suspended, the movement has grown to include calls for Hong Kong Chief Executive Carrie Lam’s (林鄭月娥) resignation.
Hong Kong is set to report preliminary second-quarter GDP on Wednesday.
The government will also conduct an interim review of the year’s economic growth forecast to reflect possible changes in the next few months more accurately, Chan said.
There have been signs this month that the mass demonstrations are starting to take a toll on the financial hub’s economy as big-spending travelers stay away.
Some global luxury retailers have said that the unrest weighed on sales due to store closures and fewer tourists.
The Hong Kong Retail Management Association expressed concern that civil unrest could damage the territory’s image as a safe environment, culinary capital and haven for shoppers.
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