Hong Kong slides into recession

Traders remain upbeat at Hong Kong's stock exchange

Hong Kong's economy has fallen into recession for the first time in five years amid a global economic slowdown.

In the third quarter, the territory's gross domestic product contracted 0.5% on a seasonally adjusted basis, after a 1.4% fall between April and June.

The government's economist, Helen Chan, said domestic demand faltered significantly in October, while exports fell to the lowest level since 2002.

Hong Kong has lowered its forecast growth for 2008, from 4-5% to 3-3.5%.

Last year, Hong Kong's economy grew by 6.4%.

"The global financial turmoil has derailed the economic upturn that Hong Kong has enjoyed for the past four years", said Helen Chan.

She added that unemployment rose marginally to a still relatively low level of 3.4%, while inflation fell significantly in the third quarter, to 4.6%.