HANG SENG has raised its GDP growth forecast for Hong Kong this year to 3.2% and expects a continued increase of 2.5% next year

The Economic Research Department of HANG SENG BANK has raised its forecast for Hong Kong's Gross Domestic Product (GDP) growth this year to 3.2%, and expects growth to reach 2.5% next year. The bank indicated that the favorable effects of foreign trade are gradually diminishing, with the driving force from "export grabbing" weakening, coupled with a high base effect, which will lead to a slowdown in economic growth next year compared to this year.

However, local demand will continue its initial rebound trend, and the expansion of the economic recovery is key to demonstrating "animal spirits," which will stimulate confidence among businesses and consumers. Hong Kong has benefited this year from increased global liquidity, but the interest rate reduction cycles of major and regional central banks are gradually coming to an end, which may pose certain risks.

The bank also anticipates that the Federal Reserve will cut interest rates twice next year, provided that Powell's successor adopts a dovish stance. The Hong Kong Interbank Offered Rate (HIBOR) may slightly decline, bringing a positive impact on the property market atmosphere