The Hong Kong economy continued to improve, albeit at a slow pace due to weaker exports.1 The unemployment rate fell further to 4.1% in the June to August period.2 This aligned with the improving economy, easing of social distancing measures, and launching of the government’s Phase II Consumption Voucher Scheme and “0+3” quarantine policy (announced in late Sept.) which stimulated a surge in online searchers for flights and hotels on some travel sites.3
Consumer sentiment in TransUnion’s Consumer Pulse Study remained relatively upbeat amid a weakening local epidemic and further relaxing of social distancing measures.
In light of the improved employment situations, more consumers reported either the same or increased income in the past three months, with a higher percentage of respondents expecting the same or growing income in the next 12 months.
Looking forward, economic activities should continue to improve (assuming the continuation of the weakening local epidemic situation), increasing consumption demand supported by the Consumption Voucher Scheme, and increasing spending and credit card activities stimulated by the ‘0+3’ quarantine policy. However, without cross-border trade between the Mainland and Hong Kong, the Hong Kong Special Administrative Region’s export performance is expected to be depressed by a worsening external environment over the remainder of the year. Tighter financial conditions may also have some dampening effects on consumer sentiment and spending.
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