Hong Kong’s economy has rebounded sharply from the Covid-19 pandemic – but it is still out of the woods and some sectors are still faltering, the city’s chief trade official said.
“The distribution of this recovery is quite uneven,” Edward Yau, Hong Kong’s Minister for Trade and Economic Development, told CNBC.Squawk Box Asia “ on Thursday.
Yau said imports and exports have been a “very strong catalyst” of growth in recent months, with total trade hitting record highs in a few months. However, retail sales are weakening and tourism is still struggling to recover, he said.
Such uneven economic performance is also and is likely to remain in the labor market as Hong Kong faces the “twin battle” of curbing the spread of Covid and revitalizing the economy, Yau added.
The Hong Kong economy grew 7.9% in the first quarter of 2021 compared to a year ago. It was the city’s first economic expansion in six consecutive quarters, down from a year earlier.
A man wearing a protective face mask stands on the Tsim Sha Tsui waterfront in Kowloon across from Victoria Harbor in Hong Kong.
Anthony Wallace | AFP | Getty Images
Before the pandemic, Hong Kong – a semi-autonomous region ruled by China – was rocked by widespread pro-democracy protests it got violent at times. The turmoil pushed the economy into recession in 2019 for the first time in a decade, fueled by a sharp drop in retail sales and tourist arrivals.
The Covid outbreak dealt another blow to the economy.
While Retail sales have recovered since February this year, the pace of growth has slowed. Meanwhile, visitor arrivals in Hong Kong remained weak.
Yau said it was encouraging that the number of daily Covid cases fell and stayed low in Hong Kong over the past month. This could allow other segments of the economy to recover, but new waves of infections could still emerge, he added.
“The lesson we learned is to try and reduce the time it takes to suppress the outbreak,” Yau said, adding that the ability will help instill confidence among individuals and companies.