Low Vaccination Rate May Harm Economy: Paul Chan

Financial Secretary Paul Chan on Sunday said he expects a ‘significant’ turnaround for Hong Kong’s economy, which contracted by an unprecedented 6.1 percent last year – even as he warned that low vaccination rates here may put this recovery at risk.

In his latest blog, Chan said local exports have been performing well over the past four months, surging 37.5 percent over the first two months of 2021. He is expecting similarly strong figures for March.

Chan also said the overall business environment here has improved recently, and he now expects first-quarter GDP figures for the SAR to “improve significantly”, after six straight quarters of contraction.

But the finance chief warned that the gains could be jeopardised by Hong Kong’s low vaccination rate.

"European countries and America are having good progress in vaccination, and they are actively planning to resume international travel," he wrote.

"If Hong Kong falls behind, it would limit the flow of people into the SAR when overseas markets have already resumed a larger extent of travel. Hong Kong's economic recovery will also be dragged down."

Chan noted that so far, only about 10 percent of the population here have received at least one dose of a Covid-19 jab. That compares with 40 percent in the United States and United Kingdom and 60 percent in Israel.

Chan added that only when a large proportion of residents have been inoculated, could social distancing restrictions be relaxed, which would allow the economy to bounce back in the shortest possible time and improve the labour market.

Meanwhile, Chief Secretary Matthew Cheung said the government remains hopeful that consumption and business sentiment can return to normal later this year.

He said the key to economic revival in the SAR is controlling the Covid-19 epidemic, and also called on people to get vaccinated.

Many Hong Kong people have been taking a wait-and-see approach on Covid-19 vaccines following multiple reports of deaths after inoculations.

However, experts have so far not established any direct link between any of the fatalities and the jabs.

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