Hong Kong’s economy grows 2.7% in first quarter amid rise in service exports

“Geopolitical tensions and tight financial conditions will continue to affect exports of goods, but some slight improvement may be seen as external demand has held up relatively well so far,” he said.

“Domestically, rising household income and the government’s initiatives to boost sentiment should help private consumption, but the changing consumption pattern of residents may pose challenges.”

Hong Kong economy grows less-than-expected 3.2% in 2023

The spokesman said ongoing economic growth should lend support to fixed asset investment but added that a longer period of tight financial conditions might have some dampening effects on economic confidence and activities.

Hong Kong welcomed more than 11 million visitors in the first quarter, more than double the amount in the same period last year.

On a quarterly basis, the economy improved by 2.3 per cent in the first quarter from the previous one.

During the first quarter, private consumption further rose 1 per cent from the same period last year after a year-on-year 3.5 per cent jump in the fourth quarter of 2023. Government expenditure dropped 3 per cent year on year in the last three months of the year.

Hong Kong economy set for fifth straight quarter of ‘moderate’ growth: Paul Chan

Exports of goods recorded growth as measured on a national account basis, following previous lacklustre performances. They jumped 6.7 per cent year on year in the first quarter while imports were up by 3.2 per cent.

Financial Secretary Paul Chan Mo-po earlier warned of a need to re-evaluate the pace of economic recovery in the city amid possible delays to US interest rate cuts, but added that there will not be any drastic adjustments to growth forecasts.

He said Hong Kong might face a higher interest rate environment for longer as the US Federal Reserve had earlier indicated any cuts might take longer than previously anticipated following a series of surprisingly high inflation readings.

The unemployment rate remains at a low of 3 per cent and inflation stands at two per cent. Property prices had experienced a yearly decline of about 7 per cent, while the stock market had fallen by 14 per cent.