Hong Kong leader Carrie Lam on Tuesday painted a bleak picture of the city's economy amid weeks of protests, but expressed hope that dialogue with peaceful demonstrators could provide "a way out" for the Asian financial hub.
Lam, the territory's Beijing-backed chief executive, said she was willing to talk to peaceful protesters to narrow current differences.
"We will immediately start the work to establish a platform for dialogue," she said Tuesday, during her weekly press conference on the ongoing protests. "This dialogue, I hope, will be based on mutual understanding and respect and find a way out for today's Hong Kong."
Hong Kong, a former British colony that was returned to China in 1997, has been plagued by weeks of unrest as hundreds of thousands took to the streets in protest against a now-suspended extradition bill which would have allowed suspects in Hong Kong to be sent to mainland China for trial.
The frequently violent rallies have since spilled over into issues of democracy amid rising concerns that civil rights and freedoms under Beijing were being eroded.
Lam reiterated on Tuesday that the extradition bill was "dead," and there were no plans to revive it.
On Tuesday, Lam also emphasized that Hong Kong's economy will be impacted from the months-long protests and said the situation may be worse than what numbers have shown so far.
"The Hong Kong economy is facing the risk of downturn," Lam said. "We can see this from the data in the first half. Actually, I think the data in the first half has not fully reflected the seriousness of the problem."
Hong Kong's government last week lowered its 2019 GDP growth forecast to between 0% and 1%, from the original range of 2% to 3%.
Various sectors have reportedly been affected, and markets are said to be hit hard as demonstrations turn increasingly violent. Most notably, the airline, retail, and real estate sectors have seen their sales decline. Hong Kong's International Airport, one of the world's busiest, cancelled flights earlier this month and cited disruptions by anti-government protesters. The city's public transit system has also been disrupted on multiple occasions.
Lam also said that Shenzhen's development will be good for the city, especially in terms of technology innovation, while stressing that Hong Kong still has unique advantages in attracting international companies.
Her comments come as China's state council called for greater development of Shenzhen, a Chinese city which borders Hong Kong and is turning into a major hub for China's manufacturing and technology sectors.
— Reuters and CNBC's Grace Shao contributed to this report.