Hong Kong may see its gross domestic product growth more than halved to 1.4 percent this year if mainland tourist arrivals are slashed by 20 percent, but the impact is expected to be short-lived, the Hong Kong Economic Journal reported Friday.
That works out to about HK$39 billion (US$5.07 billion) in economic losses, the report said, citing Andy Kwan Cheuk-chiu, director of think tank ACE Center for Business and Economic Research.
The negative effects will fade as time passes and the market adjusts accordingly, Kwan said. The study assumed a 20 percent cut in tourist numbers.
GDP growth will slow to 3.2 percent next year from 3.5 percent, falling to 3.4 percent from 3.7 percent in the following year.
Tourism still accounts for about 4.7 percent of the economy and the absolute amount of its contribution is rising, Kwan was quoted as saying. That indicates a cut in the number of mainland tourists will not jeopardize the economy.
Kwan said Hong Kong should shift from a multiple-entry policy to a scheme that limits the days a passholder is allowed to stay while seeking ways to diversify tourist destinations for the long term.
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