Government sees “strong GDP growth” in first quarter

This comes after Hong Kong’s economy contracted 6.1% over the course of 2020.

Hong Kong’s economy is expected to post a strong, positive growth in the first quarter of the year, Finance Secretary Paul Chan said after the city’s gross domestic product (GDP) growth contracted by 6.1% in 2020.

“The advance estimates of the first-quarter GDP will be published next week. We expect this to be a pretty strong growth,” Chan said. 

He cited for one, that the GDP for the first quarter will likely be stronger due to a “very low” base of a 9% GDP contraction in the same quarter last year.

He added whilst GDP ultimately contracted in 2020, a gradual improvement was seen since the third quarter.

“We are confident that with the impressive improvement on the trade side and the gradual recovery on domestic consumption, the GDP for the first quarter of this year will give us a relatively strong positive growth,” he said.

Hong Kong’s jobless rate gradually declined to 6.8% in March after peaking at 7.2% in February as the impact of the fourth wave receded.

Read also: Jobless rate fell to 6.8% in March, as fourth wave receded

Despite placing the outbreak under control, however, Chan said the government must remain “very vigilant.” He said whilst the pandemic situation is an important factor in the City’s recovery, it will still be largely dependent on the resumption of cross-border travel.

“At the end of the day Hong Kong is a very small open economy, domestic consumption alone would not be able to sustain us for strong growth - we need to continue with external trade, we need to have quality tourism to come back. This takes time,” he said.

“Also, in summer there will be graduates from universities. They also need to seek jobs. So, we expect the unemployment situation to stabilise, but there may not be marked improvement in the short term.”

Hong Kong recently moved to relaxed social distancing measures in restaurants amongst other establishment under the “Vaccine Bubble” as well as limits in local group tours.

It also announced its Air Travel Bubble arrangement with Singapore will push through in May, after being postponed since November last year.

Read also: SG-HK air travel bubble to start (again) on 26 May