SCMP Editorial

Editorial | Challenging year for Hong Kong as it aims to make economic comeback

Economists are cautiously optimistic that the city can turn around after three years of pandemic controls and damage, but much will depend on mainland China policy and global conditions

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Economists are optimistic 2023 will be remembered as a year of recovery. This looks like a safe prediction, given that the return of mainland visitors and investors could have a big impact on the local economy. Photo: Dickson Lee

SCMP Editorial

Published: 6:15am, 10 Jan 2023

Hong Kong has earned a reputation for resilience when it comes to economic setbacks and comebacks. Past recoveries from regional and global financial crises and the 2003 severe acute respiratory syndrome (Sars) epidemic remain as evidence of that.

But none of those events compares with the duration and scale of the damage sustained in the fight against the Covid-19 pandemic since it was declared nearly three years ago.

The question now is whether the end of almost all the city’s pandemic control measures and the reopening of its border with the mainland will ultimately define 2023 as a turnaround year to surpass all others.

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Economists are optimistic, but their predictions of gross domestic product growth ranging from 2 to 5 per cent also reflect understandable caution.

After all, they expect a contraction of around 3 per cent in the year just gone, following one of 4.5 per cent in the third quarter.

This is after the government downgraded its full-year forecast to between plus and minus 0.5 per cent in November amid an ongoing recession.

The outlook is clouded by rising interest rates orchestrated by the United States’ central bank, thanks to a currency link, which do not reflect local conditions and are negative for confidence in property and business investment.