The Hong Kong Special Administrative Region’s economy is forecast to grow by 1.7 percent in the second quarter, slower than the projected 2.1 percent in the first quarter, as the high interest rate environment continues to weigh on business and individual activities, according to the latest report by the University of Hong Kong.
A more optimistic economic outlook for Hong Kong is expected in the second half of the year as the United States could gradually cut interest rates, said the quarterly Hong Kong Macroeconomic Forecast released on Wednesday.
The report also showed that Hong Kong’s job market will remain stable, with unemployment rates in the second quarter expected to keep at the same level as the previous quarter, at 2.9 percent
The report predicts the city’s GDP will expand by 2.3 percent for the whole year, consistent with its previous forecast released in January. Hong Kong’s GDP grew by 3.2 percent in 2023, rebounding from the contraction a year earlier.
External trade in Hong Kong is expected to move on an upward trajectory, the university said. While exports of goods could grow by 6.5 percent in the second quarter from 4.1 percent in the first quarter, imports of goods could see growth to 5.2 percent from 1.9 percent over the same period.
With a surge in consumption overseas by Hong Kong residents, the city is projected to record a 7.5 percent increase in services imports in the second quarter. Services exports are forecast to expand by 5.9 percent thanks to the resumption of normal travel.
The report also showed that Hong Kong’s job market will remain stable, with unemployment rates in the second quarter expected to keep at the same level as the previous quarter, at 2.9 percent.
The report, conducted by the APEC Studies Program of the Hong Kong Institute of Economics and Business Strategy at HKU, has been released on a quarterly basis since 1999.
