“Make or break is the correct description”, said one economist on Monday, describing the dire situation for catering businesses in Hong Kong, where months of violent protests have plunged the bustling business hub into recession.
While the circumstances may be particularly acute for caterers who would normally be set to enjoy a seasonal revenue bump, “make or break” is probably an apt description of how most businesses operating in the city are feeling right about now.
Retailers looked on with extreme trepidation as the chaos brought the city to the brink over the summer, and things have only gotten worse. On Monday, data showed retail sales shrank 26.2% by volume in October and 24.3% by value. Those are both record contractions.
The city is expecting its first annual recession since the crisis, and Financial Secretary Paul Chan underscored the severity of the situation in remarks to lawmakers on Monday.
Chan said the city will likely log its first budget deficit in 15 years, as the economy absorbs a body blow equivalent to 2 percentage points amid the tumult. Falling tax revenue, declining income from the sale of land, the cost of stimulus and generalized economic malaise explain the expected shortfall.
“Hong Kong’s economy is now in extremely difficult times”, Chan lamented.
His recommendation: “Different sectors have to come together to stop [the] violence so that social order can be restored, citizens can return to normal life [and] businesses can resume normal operations”.
Don’t hold your breath.