Hong Kong’s economy is expected to grow 2.3 percent year-on-year in the third quarter of 2024, according to the latest report from the University of Hong Kong, though the city’s retail sector is facing a grim outlook.
Retail sales in April and May dropped 16.5 percent and 12.9 percent respectively from the same period last year, which, the quarterly Hong Kong Macroeconomic Forecast released on Thursday said, is partly due to changed consumer patterns and a surge in outbound tourism of residents.
The city’s private consumption is projected to contract marginally in the third quarter, potentially marking the first such pullback since the recovery from the COVID-19 pandemic
The city’s private consumption is projected to contract marginally in the third quarter, potentially marking the first such pullback since the recovery from the COVID-19 pandemic.
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While the scale and timing of the US Federal Reserve’s rate cut may fall short of expectations, it’s expected to provide a mild boost to Hong Kong’s economic output, the report said.
The university maintained its full-year growth forecast at 2.3 percent, in line with earlier estimates but lower than the government’s projection of 2.5 percent to 3.5 percent.
The report also showed that Hong Kong’s labor market will remain tight, with the jobless rate projected to stay at 3 percent in the third quarter.
Many local and international institutions hold mixed views on Hong Kong’s economic performance this year, saying that the economy will maintain growth momentum despite challenges.
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The Bank of East Asia said it expects the city’s economy to enjoy a 3.3 percent surge for the full year, with growth drivers shifting from the release of pent-up consumer demand and tourism recovery last year, to improved trade this year.
Dah Sing Bank also said it believes the recovery in export demand will drive economic development, projecting a yearly gross domestic product growth of 3.1 percent.
In June, the Hong Kong Trade Development Council revised its full-year export growth forecast upward to a range of 9 percent to 11 percent, 5 percentage points higher than its previous prediction.
The same month, Singapore-based United Overseas Bank raised its outlook for Hong Kong’s full-year economic growth to 2.9 percent from 2.5 percent, citing the economy’s improved performance in the first quarter.
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According to the Census and Statistics Department, Hong Kong’s GDP increased 2.7 percent in the first quarter of 2024 over a year earlier.
