"Hong Kong economic outlook worse my magic experiencethan SARS-hit 2003"

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This undated photo shows an aerial view of downtown Hong Kong and Victoria Harbor. [LYU XIAOWEI/XINHUA]

HONG KONG – The city"s finance chief projected that the novel coronavirus pneumonia (NCP) will hit the economy in 2020, particularly the retail sector, a major employer, harder than the SARS epidemic did in 2003.

In his online Sunday blog, Financial Secretary Paul Chan Mo-po said the retail, catering and tourism industries, which are considered pillars of the city"s economy, have been battered severely by the outbreak of the NCP, which has infected 26 people locally and over 37,000 on Chinese mainland since mid-December.

Government data show that retail sales plunged 11.1 percent in 2019 from a year earlier to HK$431.2 billion, the sharpest decline since 1998. Meanwhile, the catering industry recorded a 6 percent fall, the first year-on-year decline since 2003 when Hong Kong was battered by the SARS outbreak.

Chan warned about a rise in the unemployment rate from the latest recorded 3.3 percent as more and more small to medium-sized businesses in the most affect economic sectors are downsizing to save cost. Several large retailers and restaurant chains have already closed some of the outlets in busy commercial districts because of the business slump.

The tourism industry which was buffeted by the civil unrest that broke out last June is facing an even more menacing foe in the form of NCP as passenger traffic on the once lucrative routes between Hong Kong and various mainland cities is drying up. Cathay Pacific, Hong Kong"s flag carrier, reportedly has asked some of its cabin crews to take no pay leaves for two or three weeks. Some hotels are doing the same when drastic cuts in room rates have done little in wooing tourists.

Chan said he is now working on adjusting the budget, which will be delivered in late February, to better help the affected industries to cope with the worsening situation.

Also on Sunday, Chief Secretary for Administration Matthew Cheung Kin-chung said the government is sparing no efforts in clarifying rumors that have sowed panic among the people while calling on everyone to stay rational and positive in facing the threat of the NCP outbreak. For instance, rumors of impending shortages last Wednesday had triggered a mad rush for rice, toilet paper rolls and other necessities despite assurances from the government and major vendors that supplies have remained plentiful.

He wrote in his online blog that rumors are like a virus that have to be contained with concerted efforts of the government and the public. He urged the public to reject rumors and hearsay and trust only information provided by the government through various online platforms.

Cheung said that the government will make available an additional relief fund of more than HK$10 billion to extend assistance to those who are affected by the NCP outbreak.

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