GM Warburg Commercial - More Stimulus for Hong Kong

SEOUL, South Korea, September 22, 2020 (Newswire.com) - It has been more than two months since the third wave of COVID-19 infections swept through Hong Kong. Earlier this week, the number of new community infections dropped to zero for the first time since the beginning of July. After weeks of pressure to lift the harsh restrictions that have continued to cripple Hong Kong’s already fragile economy, the city is moving to ease some of its social distancing measures.

Easing of Hong Kong’s Restrictions

As part of its efforts to revive the economy, Hong Kong will allow the temporary reopening of bars, swimming pools, theme parks and karaoke facilities. The extension of dine-in services at restaurants until midnight - previously forced to close at 10 p.m. - will also be permitted. The limit of up to four people allowed to gather in public will, however, remain in effect.

Analysts at GM Warburg Commercial say that although it is hoped the easing of restrictions will help to jumpstart Hong Kong’s economy, it is unlikely that it will compensate for the hefty losses caused by the pandemic and subsequent measures to curb the spread of the virus.

Even before the pandemic, Hong Kong’s economy was negatively impacted by long-running pro-democracy protest action and the fallout from the trade war between the U.S. and China.

Another Tranche of Stimulus

To date, Hong Kong has spent nearly US $37 billion on COVID-19 relief stimulus. The funds have been rolled out in three stages and used to address necessary hospital funding requirements, tax relief, industry subsidies and other measures to cushion the economy from the worst of the pandemic fallout.

The Hong Kong government recently announced that a further US $3.1 billion dollars will be committed to COVID-19 relief measures and will be specifically targeted at supporting struggling businesses, rent relief and further virus prevention strategies.

Despite its high population density and the city’s decision to avoid a complete lockdown, Hong Kong has been largely successful in managing its coronavirus outbreak. The total number of confirmed cases is still just below 5,000, with only 102 deaths. Analysts at GM Warburg Commercial say ongoing effective management of the virus will be key to rebuilding the economy in the coming months.

Source: GM Warburg Commercial