Hong Kong GDP up 2.7% year-on-year in Q1

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Hong Kong GDP up 2.7% year-on-year in Q1

Tourism and the consumer sector are driving the economic recovery this year.

Hong Kong’s economy grew 2.7% in the first quarter compared to last year, official data showed. This was due to a strong recovery in inbound tourism and domestic demand, which will continue to be growth drivers this year.

The reporting period was the first quarter of growth after four consecutive quarters of decline.

The city’s economy contracted 4.1% in the fourth quarter of 2022. The seasonally adjusted economy expanded 5.3% quarterly between January and March.

The government maintained its economic growth forecast for 2023 at 3.5% to 5.5% after a 3.5% decline in 2022.

“If the economic recovery continues, annual economic growth is expected to be close to the upper end of the range,” a government economist told a news conference. Adolf Leung.

An improving economic situation and outlook should stimulate domestic demand, although tight financial conditions will remain an obstacle. This view was voiced by Leung in a separate statement.

He added that domestic cost pressures could increase along with the economic recovery, while headline inflation is likely to pick up until the end of 2023, with annual core and headline consumer price growth projected to remain at 2.5% and 2.5%. .9% respectively.

Economist at DBS Bank Samuel Tse pointed out that external headwinds were caused by the slowdown in the US and European economies.

“In addition, the pace of recovery in the Chinese economy is unevenly distributed,” said Tse.

HSBC Global Research raised its economic growth forecast for Hong Kong to 5.0% in 2023 from 3.8% due to a faster recovery.

“The pressure on the economy is still putting pressure on the economy. Weak global demand could dampen commodities trade while high interest rates could continue to dampen investment,” warned HSBC in a research note. “But we expect the reopening and economic recovery to more than offset this pressure,” the bank said.

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