Ellis Marshall Global analysts comment as Hong Kong’s Trade Development Council downgrades forecasts.
Earlier this week, Hong Kong’s trade promotion body downgraded its predictions for the city’s export growth as the prolonged trade dispute between the US and China shows no sign of abating.
An earlier estimation that predicted Hong Kong’s export growth would reach 5 percent this year was downgraded by the Trade Development Council to just 2 percent.
Analysts at Ellis Marshall Global say the downwardly-revised forecast comes hot on the heels of news that US President Donald Trump will decide early next month whether or not to impose further levies on Chinese goods to the value of up to $300 billion. Trump will likely base his decision on the outcome of his meeting with Chinese President Xi Jinping which is scheduled to take place at the G20 summit later this month.
In the first quarter of this year, Hong Kong’s economy lost momentum after weak growth in the final quarter of last year. Ellis Marshall Global analysts blamed weakening external demand and slowing domestic demand as well as uncertainty due to the US-China trade war for the lackluster economic expansion seen for two consecutive quarters.
The significant decline in exports also served to widen the trade deficit. Ellis Marshall Global analysts say the trend of declining exports and imports is likely to continue if the trade war continues to escalate. This will no doubt affect the economic outlook and trade prospects for Hong Kong in the long term.