HONG KONG (AP) — Hong Kong’s economy contracted in the three months ending in June as export growth decelerated and the Chinese territory prepared to launch a voucher scheme to boost consumer spending.
Economic activity shrank 1% compared with the previous quarter but was up 7.5% from a year earlier, when it was depressed by the coronavirus pandemic, according to preliminary government estimates Friday.
Exports rose 20.3% over a year earlier, down from the previous quarter’s 30.1% growth.
Consumer spending rose 6.5% over a year ago, up from the previous quarter’s 2.1%.
On Saturday, shoppers can start spending vouchers worth 5,000 Hong Kong dollars ($650) per person distributed by the government. It says some 5.5 million people signed up to receive them.
Retailing and tourism, key Hong Kong industries, already were struggling due to disruptions from anti-government protests before the coronavirus pandemic hit. Trade is recovering, but the territory still restricts travel.
The loss of visitors from mainland China has been a particularly bitter blow for the former British colony.
“The path of output is likely to remain subdued until Hong Kong’s borders reopen,” Seana Yue of Capital Economics said in a report. “The retail sector won’t reach full health until mainland shoppers return.”