Hong Kong has fallen into recession, with the retail and tourism sectors among those worst hit by anti-government protests.

The territory's GDP (gross domestic product) recorded a 3.2% decline in the third financial quarter (from July to September).

It was the second consecutive quarter with negative growth - this means the economy is in recession.

When compared with the previous year, the slump was 2.9%.

The recession is the first in a decade, with the trade war between the US and China and increasingly violent anti-government protests which began in July being blamed.


The protests have resulted in tourists cancelling travel, with a fall in trade for retailers. Sales figures for August were down 23% compared with the previous year - the worst figure on record.

Luxury jeweller Tiffany & Co and hotel group InterContinental are among the businesses to have sounded warnings about the economic consequences of the protests.

Tiffany & Co said in August that it had lost six selling days in the previous quarter, while InterContinental said in October that revenue per available room had fallen by 36% in Hong Kong.

Transport has been significantly disrupted and many business have been closing early in an effort to keep staff and property safe.

Hong Kong's government said in a statement: "Ending violence and restoring calm are pivotal to the recovery of the economy.

"The government will continue to closely monitor the situation and introduce measures as necessary to support enterprises and safeguard."

Business activity in the private sector slumped to its weakest level in more than two decades and demand from China was sharply down.

The government added: "Domestic demand worsened significantly in the third quarter, as the local social incidents took a heavy toll on consumption-related activities and subdued economic prospects weighed on consumption and investment sentiment."

Hong Kong has now revised its full-year growth forecast to a 1.3% decline, the first annual fall since 2009. It had been predicting growth of 0.1%.

The territory is one of the world's major financial hubs and many businesses aspiring to trade in China see it as a gateway.