Hong Kong maintains growth forecast for 2024 as economy expands 3.3% in second quarter

To meet the full-year forecast, growth should be between 2 percent and 4 percent later in the year, he said.

„Although trade conflicts pose risks, exports of goods should maintain positive performance if external demand remains strong,” he said.

„Continued local economic expansion should lend support to fixed property investment, but geopolitical tensions and interest rate uncertainties could dampen business confidence and property markets.”

Leung said Beijing’s decision to allow more Chinese citizens to visit Hong Kong individually rather than joining tour groups will boost market sentiment.

„But changes in the consumption patterns of visitors and residents and the relatively strong Hong Kong dollar may continue to pose challenges,” he said.

After growing 6.8 percent in the first quarter, total exports of goods rose 7.6 percent from a year earlier, while imports rose 3.4 percent.

Gross domestic product (GDP) growth is expected to accelerate to an average of 3.2 percent between 2025 and 2028 with global economic recovery and greater integration of the city with the mainland.

Some experts have previously raised concerns that the city’s economic conditions and the pressure the business sector faces are more significant than the headline figures suggest.

Retail sales fell 9.7 percent in June from a year ago, the fourth consecutive month of contraction, amid a growing trend of people crossing the border for entertainment and shopping.

More tourists are coming to Hong Kong, but many of them are not spending as much as visitors did in the past.

Mainland visitors rose 47.3 percent year-on-year in the first seven months.

Simon Lee Chiu-bo, an honorary fellow at the Asia-Pacific Institute of Business at the Chinese University of Hong Kong, said on Friday that he expects the annual growth rate to be 2 to 3 percent. With a GDP of less than HK$700 billion, it hit a low base last year.

„The other three quarters were all higher than HK$700 billion last year. I’m not optimistic about the third and fourth quarters this year because of the higher base of comparison,” he said.

Lee added that consumption was still weak and the main drivers of growth came from exports, a small part of capital spending.

Economist Billy Mak Sui-Choi, an associate professor at Baptist University’s Department of Accounting, Economics and Finance, said the government’s full-year forecast was realistic, with growth stronger in the second quarter than in the first.

„Four core industries – finance, trade and logistics, tourism and professional services – are largely dependent on the financial sector, which is improving,” he said.

„So even if there isn’t a particularly significant growth, under normal circumstances there wouldn’t be a steep decline.”

While the number of tourists is recovering, the effects can be mitigated by lower average spending per head, which is contributing to moderate growth in Hong Kong’s economy, he said.

Mak said it was too early to comment on the effects of a potential U.S. interest rate cut because it would depend on when and how much it happened.

“Property is one of the main ways people in Hong Kong store their wealth. If there is enough of a cut, the wealth effect increases, so naturally there will be more consumption,” he said.