The HK Macroeconomic Forecast published by the university noted that the city’s tight social distancing measures eroded output growth in the first quarter.

“Consumer sentiment was heavily dampened with retail sales volume dropping by 17.6 percent in February 2022. Hong Kong’s real GDP is estimated to drop by 2.9 percent in 22Q1, reflecting the impact of the disruption from the epidemic,” it wrote.

Meanwhile, the unemployment rate is expected to go down to 4.4 percent in the second quarter as the relaxation of infection-control measures comes into effect, according to the university forecast.