Typhoon Hato could cost Hong Kong’s (HK) economy up to HK$8bn ($1bn) in losses after bringing the city to a temporary standstill, say analysts.
Mass business closures, flight cancellations, a paralysed stock market and the suspension of public transport were just some of the disruptions to HK after a category 10 typhoon—the highest in HK’s storm warning system—was issued by the authorities on Wednesday morning.
Dylan Bryant, HK manager at insurance firm Swiss Re Corporate Solutions, told the South China Morning Post that according to internal research, the economic impact on the Asian financial hub from a typhoon classified as category eight or above would be around HK$4.29bn.
Earlier this year Swiss Re Corporate Solutions launched Hong Kong’s first insurance policy that specifically provides cover in the event of a category eight typhoon hitting the city.
He said the figure was calculated by combining the business losses of major sectors in a large-scale typhoon. These industries include transport, tourism, marine, financial services, agriculture, event organising, entertainment, public administration and import-export firms.
However, Terence Chong Tai-Leung, Chinese University of HK associate professor of economics, estimated the economic loss caused by Hato at around HK$8bn, based on the average value of gross domestic product generated in one day, taking reference from last year’s figure.
Category 10 classification has only been issued 14 other times since 1946, or one for every 72 storms. The last time it was issued was for Typhoon Vicente in 2012, according to the HK Observatory.
The typhoon slammed into Hong Kong early Wednesday morning, lashing the city with destructive winds and waves, which uprooted trees, flooded streets and forced most businesses to close.
The Observatory said that by midday, Hato was packing maximum sustained winds of more than 200 kmh (124mph).
After the government upgraded the storm, originally classified as category three, to category 10, government offices, schools and courts were shut down, around 450 flights were cancelled and the stock market suspended trading for the day.
The last time Hong Kong had to cancel full-day trading was in October 2016, when Typhoon Haima forced schools to close and airlines to suspend flights.
MTR Corporation, HK's public transport service, cancelled train services in open sections and limited services underground.
Macau’s government broadcaster TDM said the storm, the strongest in the region since 1968, cut electricity supplies to half of Macau’s 600,000 residents, caused blackouts across most of the casino district and disrupted mobile phone and internet networks.
Many casinos were forced to switch to emergency generators.
Authorities downgraded the storm to a category three by late afternoon and said government services, the courts, financial markets and companies would resume normal business on Thursday.
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