Hong Kong’s hottest spherical of restrictions to cease the unfold of the Omicron variant is probable to pose a downside danger to projections for enlargement in economic expansion of 3 per cent this year and will hold off border reopening with China right until the 2nd fifty percent, Fitch Ratings reported in a observe.
The ratings company also claimed the ongoing restrictions on worldwide arrivals, as Hong Kong pursues a zero Covid coverage, will build “obstacles to the territory’s skill to serve as a regional headquarters for foreign nationals, a trend which has taken condition since 2019.”
Hong Kong this week banned flights from about eight high-threat nations, together with many G7 economies, as it battles Omicron clusters. It has also shut firms, these types of as fitness centers and spas and imposed a 6 pm curfew on dine in eating places. The steps are established to be in area for two months, but may be prolonged, Fitch said.
The border reopening with China experienced been anticipated previous thirty day period and the moment a travel corridor was recognized, reopening with Macau was assumed to be imminent. Guests from Hong Kong have usually produced up more than 15 per cent of Macau’s gross gambling profits.
“The delay will dampen the close to-time period outlook for cross-boundary leisure vacation and business enterprise, as perfectly as Hong Kong’s retail sector. Retail has been a laggard in the labour sector recovery, given its prior reliance on mainland vacationer paying out. For now, we continue to expect the authorities to start off a cautious phase-in of the corridor through 1H22.”
Fitch notes that the Hong Kong government has not still declared any extra fiscal measures to cushion the effect of the renewed tightening of social distancing actions. “However, we feel that these stay a distinct chance, significantly if the limitations will need to be extended or tightened even more. Hong Kong has adequate fiscal personal savings to accommodate further pandemic-similar expenditures, but these buffers have presently seen a marked decrease since the onset of the pandemic in 2020.”