Bank forecasts 3.3pc growth

Hong Kong’s economy will grow by around 3.3 per cent a year between next year and 2020, Hang Seng Bank forecasts.

That is slower than the average annual growth of 4 per cent between 2010 and last year.

In a monthly economic report released on Tuesday, the bank said it expected the economy’s growth model to change over the next few years with a return to a growth trajectory driven by capital and productivity, and warned “this business cycle is likely to be volatile”.

It said Hong Kong’s current recovery had more to do with factor accumulation – increased inputs – than exceptional productivity growth. Between 2010 and last year, the total contribution from improvements in human capital and increased productivity added 1.9 percentage points to gross domestic product growth, compared with a contribution of 2.1 percentage points from labour and capital inputs.

“This shift in growth mix towards factor accumulation raises a question about future growth prospects,” the bank said.