Hong Kong’s economy rebounded with a 2.7 per cent growth in the first quarter, the city’s leader on Tuesday revealed, striking an upbeat note for the coming months by pointing to the ongoing “golden week” tourism surge from across the border.
Chief Executive John Lee Ka-chiu said he expected an influx of 600,000 mainland Chinese visitors across the five-day break, which started on Saturday. He dismissed concerns that tours to various neighbourhoods would disrupt the lives of residents, saying the overall trend was a “welcomed sign”.
“Hong Kong always emphasises its attractions in many regards, with not just favourite shopping spots or good theme parks. We also have country parks and a lot of outlying areas which we think are very attractive to tourists,” Lee told reporters before his weekly meeting with key decision-making body the Executive Council.
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“We are seeing an active, energetic and ‘hotter’ city,” he insisted.
Figures mentioned on Tuesday morning by the city’s leader showed the economy had grown year on year by 2.7 per cent in the first quarter, from a contraction of 4.1 per cent in the past three months.
“The series of large-scale promotional activities has helped stimulate tourism and consumption and boost the economy,” Lee said.
“Despite exports still falling in the first quarter, with the rapid growth of the mainland economy and the accelerated recovery of the city’s aviation capacity, I believe the economy in the second quarter will be better than the first, and this year’s economic performance will be better than last year’s.”
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He added that more than 760,000 tourists, including 320,000 mainlanders, had visited the city in the first three days of the Labour Day “golden week” break.
Lee voiced confidence the figure for mainland visitors would hit 600,000 when the holiday period ends on Wednesday.
The chief executive added he had observed that tourists had diverse interests in places they wanted to see in Hong Kong, from “scenic spots and historical sites to theme parks, shopping hotspots, country parks, outlying islands and small shops in local districts”. He added: “All this fully demonstrates Hong Kong’s charisma and soft power.”
Lee also dismissed accusations of disturbances from tour groups in local neighbourhoods such as Kennedy Town or on islands like Cheung Chau. “I am in support of diversity and creating more attractions for tourists,” he said.
“This will not just help tourism, but also make local developments go hand in hand with the development of tourism, helping overall job creations and development of the economy, and also creating a positive image of Hong Kong being a very vibrant and attractive city.”
Lee said public order at various tourist spots was generally good during the long weekend, while crowding caused by tour groups eating in To Kwa Wan and Hung Hom was greatly improved, as many operators had been diverted to other places.
He added the government would ramp up efforts to promote the use of electronic payment to bring convenience to visitors.
The city leader also hailed the HK$20 million (US$2.5 million) “Happy Hong Kong” campaign, which kicked off on Saturday with discounted film tickets and free festival passes aimed at boosting the economy, saying most residents enjoyed the events and had smiles on their faces.
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The film promotion on Saturday, with tickets priced at just HK$30, had drawn more than 222,000 cinema-goers, breaking the record for single-day entries in April, while over 44,000 visitors joined the gourmet food fair in Wan Chai on the weekend, Lee said.
Meanwhile, the International Monetary Fund (IMF) has lowered the forecast for Hong Kong’s economic growth to 3.5 per cent this year, 0.4 percentage points lower than the prediction last October, according to its Regional Economic Outlook report.
It also estimated the city’s economic growth to be at 3.1 per cent next year, up 0.1 percentage points from the previous forecast.
Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, said the latest gross domestic product data showed Hong Kong had benefited from increased consumer spending after Covid-19 measures were lifted.
“The renewed tourist inflows should help support Hong Kong’s heavily battered tourism sectors. With 600,000 mainland visitors coming in, it can bring HK$2.5 billion of spending or 0.1 per cent of GDP within five days,” he noted.
“Still, the pace is gradual as the number of mainland tourists is only 60 per cent of pre-pandemic levels.”
Ng also estimated the economy would grow by 4 per cent in 2023, an upwards revision from the previously estimated 3 per cent.
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Iris Pang, chief economist for Greater China at financial services firm ING, said the latest 2.7 per cent growth was considered “quite slow”, as last year’s base effect was negative.
“Surely this signals Hong Kong is not in a recession any more. But it also reflects that the recovery lacks strength,” Pang said.
She added further economic recovery in the coming quarters depended on cross-border activities, adding the “golden week” had helped with recovery. She said similar retail sales growth was expected in the summer.
But Pang warned the United States was expected to go into recession in the fourth quarter. “By that time, exports and imports of mainland China and Hong Kong would be weak. That would put pressure on the economy again,” she said.
Additional reporting by Kahon Chan
More from South China Morning Post:
- More than 310,000 visitors arrive in Hong Kong to eat, shop and play as Labour Day ‘golden week’ holiday begins
- Island warriors: Hong Kong’s Cheung Chau another tourist hotspot for mainland Chinese visitors over ‘golden week’, businesses report brisk sales
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