Hong Kong’s Economic Growth

HONG KONG (Reuters) – Hong Kong’s economy expanded by 3.3% in the second quarter from a year earlier, the government announced on Friday, indicating continued growth potential.

The economy had expanded by 2.7% in the first quarter of 2024.

“Looking ahead, the economy should continue to grow in the remainder of the year, but various factors including geopolitical tensions and global economic and interest rates outlook may pose uncertainties on different fronts,” stated Adolph Leung, a government economist.

“Exports of goods should maintain positive performance if external demand holds up, although trade conflicts present risks.”

On a seasonally adjusted quarterly basis, the economy grew 0.4% in the April-June period, compared to a growth of 2.3% in the January-March quarter.

The government has kept its full-year economic growth forecast for 2024 between 2.5% and 3.5%.

As a major financial hub, Hong Kong is attempting to recover after a three-year COVID-19 lockdown. While visitor arrivals are on the rise, tourists are reportedly spending less.

Additionally, the recovery is affected by a rise in residents traveling to the mainland for shopping and entertainment due to lower prices there.

However, several Chinese cities have joined a scheme allowing residents to travel to Hong Kong independently, instead of through tour groups, in an effort to stimulate Hong Kong’s economy. The number of cities participating in the scheme has increased to 59.

The Hong Kong Tourism Board reported that the city welcomed about 25 million visitors in the first seven months of the year, marking a 52% year-on-year increase, which includes 19.3 million visitors from mainland China, a 47% increase from last year.