* Economy already in recession, Q4 seen worse than Q3
* 2020 GDP to take a hit from measures against China virus
* Retail, tourism worst hit by protests, health scare
By Clare Jim and Marius Zaharia
HONG KONG, Feb 3 (Reuters) - Hong Kong is due to unveil the depth of its first recession in a decade later on Monday, as violent anti-government protests and trade tariffs between Washington and Beijing took more steam out of the economy in the final quarter of last year.
The worst is yet to come, with no end in sight to the protests in the Chinese-ruled city and a new coronavirus outbreak in mainland China.
Hong Kong, which has so far seen 15 confirmed cases of the virus, has taken measures to reduce the flow of visitors from China where the death toll has risen to 361. The city’s retail and tourism sectors rely heavily on spenders from the Chinese mainland.
IHS Markit predicts a 5.8% annual contraction in the fourth quarter, while ING predicts 7.0%.
The economy shrank by 3.2% in July-September from the previous quarter and 2.9% from a year earlier.
“The impact of the Wuhan virus epidemic is likely to further increase the negative shocks...in the near term,” said Rajiv Biswas, Asia-Pacific Chief Economist at IHS Markit.
ANZ analysts predicted a 1.4 percentage point negative impact on Hong Kong’s first quarter gross domestic product from the effects of the virus, making it the worst hit region in Asia outside mainland China.
It was always going to be tough for Hong Kong to navigate 2019, with the U.S.-China trade war bound to hurt one of the busiest trading hubs in the world.
But protests have scared tourists and shoppers and often paralysed transport, shaking its remaining key pillars of growth.
In the past week, restaurants and shopping malls have been almost deserted, with people avoiding unnecessary exposure to large crowds and staff at many large companies working from home to protect themselves from catching the virus.
Gordon Lam, convener of a mom-and-pop restaurant alliance, said some eateries saw a 50% drop from a year earlier in Lunar New Year holiday business, much worse than during the protests.
“People didn’t even want to go out to visit family,” said Lam, who owns a hot pot shop.
In November, the most recent data available, retail sales fell for a 10th consecutive month by 23.6% year-on-year.
Tourist arrivals plunged by an annual 55.9% in November, their steepest fall since May 2003, when the city was hit by an outbreak of Severe Acute Respiratory Syndrome (SARS) — its previous major health crisis, which at the time caused a recession on its own.
Also, the civil unrest has drawn corporate heavyweights including HSBC and Cathay Pacific into the political turmoil, underscoring the tightrope businesses must navigate between protesters and the city’s political masters in Beijing.
Hong Kong — one of the world’s most important financial hubs with total banking, fund and wealth management assets worth more than $6 trillion — has pledged HK$35 billion ($4.50 billion) in stimulus to prop up the economy. Further measures are expected in a budget announcement later in February.
$1 = 7.7725 Hong Kong dollars Writing by Marius Zaharia; Editing by Jacqueline Wong