A survey conducted by CPA Australia revealed that two-thirds of accountants expected continued economic contraction in 2020.
This marks a sharp increase from the one-fifth who expected a recession last year and 4 percent the year before. Hong Kong posted a decade-low 2.9 percent year-on-year GDP decrease and 43 percent of respondents of the CPA Australia survey expect another decline of more than 1 percent in 2020.
«There is no doubt that external and local uncertainties are making our respondents anxious over the economic outlook,» said Roy Lo, Greater China divisional president at CPA Australia. «The slowing global economy, the U.S.-led trade war, and lower economic growth in mainland China are negatively impacting Hong Kong’s economy, with the continuing social unrest making a tough situation worse.»
Navigating Rough Waters
Given the economic headwinds, 30 percent of respondents expect headcount reduction from local businesses (up from 15 percent last year) and 50 percent expect cost management to be a key focus.
But in order for Hong Kong to recover, CPA Australia’s Lo urged a focus on rebuilding business confidence and competitiveness as an international financial center through greater push for fintech development and the introduction of targeted tax incentives for further support. Its survey echoed the sentiments with one-third of respondents naming investments in innovation and technology as key long-term growth drivers.
«Technological advances will not stop disrupting traditional industries and transforming business models, regardless of the slowing global economy,» Lo said.
