Carrie Lam said traffic disruptions and confrontations between police and protesters have hurt the economy, particularly the retail and food and beverage sectors.
Hong Kong's leader Carrie Lam on Friday ruled out concessions to "silence the violent protesters," as pro-democracy activists who have staged months of demonstrations rallied at the city's airport.
Her comments came as she warned that the demonstrations now in their third month were causing economic chaos in the international financial hub.
Lam, whose support for a bill to allow extradition to mainland China sparked the unrest, said the economic impact threatened to be worse than the 2003 SARS outbreak or the 2008 financial crash for the city.
"Compared to the economic downturn caused by SARS that we handled previously, even to the  economic crisis, the situation this time is more severe," she said at an abruptly-organised press conference on Friday afternoon.
"In other words, the economic recovery will take a very long time."
The private sector and the tourism industry in particular have already raised the alarm, with travel agencies reporting 50 percent drops in group tour bookings and the tourism board saying arrivals fell double digits last month.
Protesters have staged almost daily rallies and faced increasingly violent confrontations with police, prompting several countries to issue Hong Kong travel warnings for their citizens.
The protests began over the controversial extradition bill but have morphed into a broader movement demanding democratic reforms.
TRT World spoke to journalist Samantha Vadas in Hong Kong for more.
Lam has refused to cave in to the demands, which include a call for the direct election of the city's chief executive, currently chosen by Beijing.
"As far as a political solution is concerned, I don't think we should just sort of make concessions in order to silence the violent protesters," she said.
"We should do what is right for Hong Kong. And at this moment what is right for Hong Kong ... is to stop the violence, and to say no to the chaotic situation that Hong Kong has experienced in the last few weeks, so that we can move on."
The weeks of demonstrations pose the biggest threat to Beijing's authority since Hong Kong's handover from Britain in 1997 and mainland authorities have been infuriated.
China's aviation regulator demanded on Friday that Hong Kong's Cathay Pacific carrier prevent staff who have supported the protests from working on flights going through Chinese airspace or arriving in the mainland.
The regulator also ordered the city's flag carrier to handover identity information of staff on mainland-bound flights starting on Sunday — declaring unapproved flights would not be allowed in.
'Set it on fire'
Activists on Friday showed no sign of backing down, staging a new sit-in at the Hong Kong airport's arrivals hall — the first of three days of rallies planned at the transport hub.
"No rioters, only tyranny," the demonstrators chanted, with some holding signs reading, "Save Hong Kong from tyranny and police brutality!" read one sign.
The airport sit-in is the second time the demonstrators have brought their message to the busy travel hub, hoping to garner support from international arrivals.
"We want to tell the passengers what's happening in Hong Kong," said Charlotte Au, a 16-year-old student among the protesters.
Some passengers arriving at the airport stopped to take photos or look at leaflets being handed out by the demonstrators. Others offered protesters a thumbs-up.
Clara Boudehen, visiting from France, said she was "very impressed" by the rally.
"Our democracy is not absolute, we have to fight for it," she said. "To see the population fight for democracy is very important."
Monica Yoon Hee Jung, who had just arrived from Korea, said she had said she had been slightly nervous about her trip but found the sit-in "really peaceful.
"They are not aggressive at all. I feel they are trying to show their real heart. Very genuine," she said.
On Friday evening, protesters gathered in the Wong Tai Sin neighbourhood, where police earlier this week fired tear gas at protesters for a subversive play on a Chinese festival where offerings are burned to appease the spirits of the dead.
Around 100 protesters gathered to burn paper money featuring caricatures of Lam and emblazoned with the logo "Hell Bank Note" as others looked on.
Police watched the protesters from a distance, ignoring as activists shouted insults and pointed lasers at a paper effigy of Lam while chanting "set it on fire."
Further protests are planned for the weekend.