Hong Kong’s economy recorded moderate growth in the first quarter of 2024, with real GDP expanding by 2.7% year-on-year, according to advance estimates. On a seasonally adjusted quarter-to-quarter basis, real GDP increased by 2.3%. Looking ahead, several factors are expected to influence the economic landscape of the region.
Exports of services are anticipated to receive a boost from the revival of inbound tourism and the Government’s efforts to promote a mega event economy. However, geopolitical tensions and tight financial conditions may continue to affect exports of goods, though some improvement is possible due to relatively stable external demand.
Domestically, rising household income and the Government’s initiatives to boost sentiment are expected to support private consumption. However, changing consumption patterns pose challenges. Continued economic growth is likely to support fixed asset investment, although prolonged tight financial conditions could dampen economic confidence and activities.
The value of merchandise exports continued to grow in March 2024 over a year earlier. Exports to the Mainland rose further, while those to the United States and the European Union fell. Exports to other major Asian markets showed mixed performance.
In terms of inflation, overall inflation should remain contained in the near term. While domestic costs may face upward pressures as the economy grows, external price pressures are expected to trend downward. However, heightened geopolitical tensions could bring uncertainties.
The seasonally adjusted unemployment rate was 3.0% in January–March 2024, slightly up from the previous period. The labour market is likely to remain tight as the economy continues to grow.
Total retail sales saw a mild decrease of 1.3% in the first quarter of 2024 compared to a year earlier, partly due to a high base of comparison for visitor spending and the Easter holidays. On a seasonally adjusted quarter-to-quarter basis, total retail sales increased by 0.3%.
Looking ahead, further revival of inbound tourism and rising household income should support the retail sector. Government efforts to promote a mega event economy and boost sentiment are also expected to help. However, challenges from changing consumption patterns remain.
In conclusion, Hong Kong’s economy is showing signs of moderate growth, supported by various factors including rising household income, Government initiatives, and external demand. However, challenges such as geopolitical tensions and changing consumption patterns need to be monitored closely.
Source: gov.hk