HK to cut growth forecast, but gradual recovery expected

A downward revision is inevitable in Hong Kong’s growth forecast for this year, but its economy is set to gradually recover as the city is emerging from the fifth wave of COVID- 19, Financial Secretary of the Hong Kong Special Administrative Region ( HKSAR) Paul Chan Mo- po said on Sunday.

The selection of Hong Kong’s new chief executive, who has vowed to boost the city’s global competitiveness, is also expected to rev up the local economic recovery, according to a veteran observer.

The COVID- 19 pandemic continues to put pressure on people’s livelihoods, societies and economies across the world, Chan said in a blog post on Sunday, citing the city’s lackluster first- quarter economic performance.

The HKSAR’s GDP fell by 4 percent in real terms in the first quarter from the year before, ending a streak of yearly expansion over the previous four quarters amid weak demand at home and abroad, the city’s Census and Statistics Department revealed on Tuesday.

Growth will improve along with the gradual containment of the virus and the recovery of local economic activity. Nonetheless, it will still take time for the economy to reboot internally while the external environment remains elusive, he continued.

“We’re re- examining the economic growth forecast and will release the latest forecast next week. Currently, it seems a downward revision is inevitable,” Chan said.

In his budget address in February, Chan put the city’s economic growth at a range of 2- 3.5 percent in real terms this year. The HKSAR’s economy expanded 6.4 percent in 2021.

Hong Kong’s economy is fairly internationalized, subject to the pandemic evolution and global economic fluctuations, said Tian Feilong, a member of the Chinese Association of Hong Kong and Macao Studies.

Tian was upbeat on a turnaround in the local economy as he derived confidence from the newly elected chief executive designate.

By securing 99.16 percent support in voting on Sunday, John Lee Ka- chiu was chosen as the sixth- term chief executive designate of the HKSAR.

“The election of the new chief executive, exemplifying patriots governing Hong Kong, would tremendously ease the city’s internal frictions and gather strength for its economic rebooting,” he said.

A push for improved regional and international competitiveness of Hong Kong is a highlight of Lee’s policy agenda, Tian said.