Hong Kong economy grows at fastest pace in six years, smashing gloomy forecasts
GDP expands by 4.3pc buoyed by stock markets, hot property sector, growing employment and positive global outlook
Hong Kong’s economy grew at its fastest pace in six years in the first quarter, putting it on track to hit the top end of the government’s target for 2017.
Shrugging off officials’ previous gloomy forecasts of tepid performance, gross domestic product grew 4.3 per cent, according to official figures released on Friday.
The expansion in the economy was boosted by the buoyant stock market, increased trade, a hot property sector, robust employment and an encouraging global economic outlook, the government and experts said.
The overall performance was well above the 3.7 per cent average forecast by analysts.
Updated figures for the final quarter of 2016 were up 0.1 per cent to 3.2 per cent, signalling a fast and sustained improvement in the economy, experts said.
The economy was “sustaining the improving trend that began in the second quarter of last year”, acting government economist Andrew Au Sik-hung said.
He expected the momentum to continue, thanks to both global and mainland economic growth boosting trade, and higher visitor numbers to stimulate the retail and services sector.
Kwon Young-sun, senior economist at Nomura, said: “Growth momentum is intact in Hong Kong. It will continue into the second quarter.”
The better-than-expected economic expansion suggests that the government is on track to meet its estimated 2 to 3 per cent growth for the entire year.
Nomura has now upgraded its Hong Kong growth forecast, predicting that GDP will rise 2.7 per cent instead – 0.5 per cent more than the original estimate. Kwon attributed it to a resilient job market, higher wages and lower inflation.
However, Royal Bank of Scotland Asia economist Vaninder Singh said the strong property market could be weakened by a rise in US interest rates, curbing overall growth.
Kwon said the better-than-expected growth was good news for chief executive-elect Carrie Lam Cheng Yuet-ngor, who would inherit a strong fiscal position and a positive business outlook.
“The new chief executive will be on a very good foundation,” he added.