Hong Kong’s economy grew at a better-than-expected pace of 2.7 percent in the first three months of 2024, according to advance estimates announced by the Census and Statistics Department yesterday, a sign that the city’s post-pandemic recovery is stabilizing.
The growth is much faster than the market estimates of 0.8 percent, though it is lower than the 4.3 percent increase in the fourth quarter of last year.
The administration attributed the surprising growth in gross domestic product to the rising number of tourists to the city, the significant jump in service exports and the improved goods exports. However, it also noted that the low base from a year ago is a contributing factor.
Though tourism is expected to further recover, “a longer period of tight financial conditions may have some dampening effects on economic confidence and activities,” a government spokesman said in a statement.
In the first quarter, household spending expanded only 1 percent, indicating still-weak sentiment. Exports of services, which includes tourist spending, rose 8.1 percent, down from the 21.2 percent growth in the last quarter of 2023.
Meanwhile, Morgan Stanley slashed its forecast for Hong Kong’s retail sales to a decline of 5 percent this year, from an expected 5 percent rise previously. The US investment bank anticipates customer spending to be sluggish due to high interest rates and weak economy.
However, Hang Seng Bank (0011) believes that customer confidence will improve thanks to a solid labor market and tourism will continue to recover with the government’s supportive measures.
HSB maintains its forecast of Hong Kong’s full-year growth at 2.8 percent.
Hong Kong United Times丨香港聯合時報丨HKUT 