UBS Global Research lowered its 2020 Hong Kong GDP forecast to -0.5%, against its previous forecast of 1.2% and the Bloomberg consensus of 0.2%.
The research house also revised down its 2019 growth estimation to -1.3% from previous estimation of -1.1%. But it maintained its 2021 forecast at 2.9%.
UBS said there have been some green shoots recently, but it does not think it is good enough yet. The US-China "phase one" deal and the improved regional and global growth outlook should offer support to Hong Kong's economy as global trade and financial centre.
However, it said that the impact on the real economy from the escalation of social events at the end of 2019 is bigger than UBS's original expectation, and the lagged impact will likely last longer.
Unemployment accelerated, putting downward pressure on income and consumption growth. On top of this, the outbreak of the 2019-nCov virus, assuming the current level of severity, will likely put downward pressure to normal business activity especially in tourism arrival, business conferences and gatherings.
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