Hong Kong Lowers Full-Year Growth Forecast to 3.2% Amid Geopolitical Tensions, High Interest Rates

Growth projections fall from the August estimate of 4-5% due to unsettling external environment, elevated geopolitical uncertainties, and tight financial conditions; however, inbound tourism and private consumption expected to cushion the downturn.

• The Hong Kong government has lowered its full-year economic growth forecast to 3.2%, citing worsening external environments, geopolitical tensions, and high interest rates.
• Despite the downward revision, inbound tourism and private consumption are expected to continue underpinning the economy for the rest of the year.
• The real gross domestic product (GDP) growth for 2023 was initially forecasted to be 4-5%, but actual performance in the first three quarters and near-term outlook necessitated the adjustment.
• In Q3, GDP rose by 0.1% to 4.1% when compared with the previous three-month period, but it decreased compared to the April-June quarter, which saw a 1.3% slide.
• Previously in August, officials revised their full-year GDP forecast for 2023 from between 3.5 and 5.5 per cent to between 4 and 5 per cent, predicting a weakened global trade environment would weigh on exports.

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