The US-China trade war and months of seething pro-democracy protests last year had already pushed the business hub's economy into negative territory.
The virus has compounded those woes, leading to an even more stark drop in tourist arrivals and empty streets, pushing many smaller businesses towards bankruptcy.
On Friday night the city's pro-Beijing leader Carrie Lam said the government would dip into its financial reserves – some of the world's healthiest – to give cash subsidies to sectors hit hardest by the crisis.
"We hope to do our best to avoid large scale closures and layoffs," she told reporters.
Lam, who has record low approval ratings, announced one-off subsidies for people such as construction workers, security guards and janitors to help them buy protective equipment.
The government will also issue HK$80,000 ($10,300) to licensed travel agencies, smaller restaurants and retailers as well as HK$5,000 to street hawkers, HK$200,000 to licensed restaurants and factory canteens and a further HK$5,000 to around 200,000 low income families.
From Saturday, February 8, Hong Kong began enforcing a mandatory two-week quarantine for anyone arriving from mainland China to stop the deadly coronavirus from spreading.
Multiple airlines and governments have also blocked flights to and from Hong Kong, causing the arrivals to crash.
Earlier this week, neighboring Macau announced plans to give all its residents store cards charged with 3,000 patacas ($374). – Rappler.com