Goldman Sachs slashed its growth forecast for Hong Kong as pro-democracy protests stretched into their third week, with no end in sight.
The bank lowered its fourth quarter gross domestic product (GDP) estimate to 2 percent from 2.5 percent on expectations of lower tourist spending – an important growth driver in the semi-autonomous region.
"The most direct implication is likely related to the territories' tourism industry," Goldman Sachs economists led by Andrew Tilton wrote in a note published late Friday.
"Tourists' spending during the Golden Week holidays was probably hit hard due to the social disruptions, and the unfolding political developments could imply risk of longer-term impact on mainland tourist arrivals," they said.
Hong Kong's tourist arrival statistics for the National Day Golden Week holidays from October 1-7 do not show a major adverse impact, but anecdotal reports indicate tourist shopping took a hit as many shops and restaurants in occupied areas chose to close.
Retailers have been under severe pressure over the past few weeks, Allan Zeman, chairman of Lan Kwai Fong Holdings, the biggest landlord in the restaurant and bar area in Hong Kong's business district, told CNBC on Monday.
"[The protests] have paralyzed traffic, business. People have been complaining very badly. For retailers, business has been non-existent for most. With higher rents in Hong Kong, it's really caused a problem," he said.