Finance chief says Hong Kong on track for strongest quarterly growth in 5 years

Hong Kong is set for its strongest quarterly growth in almost five years, the city’s finance chief has said, citing a 17 per cent rise in visitor numbers and a 5.2 per cent increase in retail and catering activity. Financial Secretary Paul Chan Mo-po said in his Sunday blog that 602,000 visitors entered Hong Kong in the first two days of mainland China’s Labour Day “golden week”, up 6 per cent year on year. Despite a complex and rapidly changing external environment, Chan said Hong Kong’s economy continued to improve in both scale and quality, supported by stronger private consumption as well as solid exports and fixed investment. “The first-quarter Gross Domestic Product forecast to be released this week is expected to accelerate further from the revised 4 per cent growth in the fourth quarter of last year, marking the strongest quarterly growth in nearly five years,” he said. He added that inbound tourism remained strong, with first-quarter visitor numbers rising 17 per cent year on year to more than 14.3 million, a post-pandemic quarterly high. Chan said arrivals were expected to exceed the original full-year forecast of 53.8 million, helping to push total inbound tourism-related spending above HK$240 billion, up 9.5 per cent from last year. “These factors will consolidate the positive outlook for the local retail and catering sectors, continuing to provide support for overall economic growth and the labour market,” he said. He pointed to a 5.2 per cent year-on-year increase in daily retail and catering spending in the first quarter, with expenditure at full-service restaurants rising 8 per cent. Chan said both visitors and residents had been active across the city in recent days, from shopping centres to country parks. “Many shops and restaurants are expecting a decent business performance during this golden week,” he said, referring to the holiday period from May 1 to 5. He also highlighted a 32 per cent rise in export value, marking the 25th consecutive month of growth and the strongest quarterly performance in five years. He added that market sentiment remained positive, with robust stock trading and continued upwards momentum in the residential property sector. On employment, Chan said the jobless rate fell to 3.7 per cent in the first quarter, while earnings for full-time employees rose by more than 3 per cent. He said Hong Kong should focus on both “stability” and “progress”, particularly by accelerating the adoption of artificial intelligence across sectors and strengthening talent development. “Hong Kong can also use its stable development and resilience to resist global uncertainties and shocks, and accelerate its economic development towards higher quality,” he said.