Hong Kong Expects 2021 Growth Near Top of Forecasted Range
Hong Kong Expects 2021 Growth Near Top of Forecasted Range
(Bloomberg) -- Hong Kong’s economy will likely expand near the top of the government’s forecast range this year, with inflation pressures expected to ease.
Gross domestic product is set to grow 6.4% this year, close to the upper end of a previous range of 5.5% to 6.5%, the city’s government said in a release Friday. The forecast for underlying inflation this year was lowered to 0.7% from 1%.
The outlook comes amid mounting headwinds to the economy’s recovery as the government sticks to its Covid-zero strategy in order to reopen borders to the mainland, while restricting most other tourists.
The government maintained its year-on-year GDP growth estimate for the third quarter at 5.4% and 0.1% on a quarter-on-quarter basis.
Growth momentum in the city has slowed, with the city’s Covid-zero status raising questions about its future as a global financial hub. Foreign business leaders including the European and American chambers of commerce have expressed mounting frustration with the lack of progress on loosening quarantine rules that have severely restricted overseas travel.
Chief Executive Carrie Lam has repeatedly insisted the first priority is reopening access to mainland China.
While an electronic cash voucher program distributing HK$5,000 ($642) to eligible residents has given a boost to local consumption in the quarter, the effects of the one-time program will fade over time as key revenue from international tourism and travel remains largely absent.
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