Hong Kong economy shrinks ‘worse-than-expected 3.5 per cent’ in 2022, but experts predict 3 per cent growth this year under return to normal

Hong Kong’s economy shrank by a worse-than-expected 3.5 per cent last year but experts have forecast a rebound in 2023 as the city gradually returns to normal with the lifting of almost all Covid-related restrictions and improved consumer sentiment.

Advance figures released on Wednesday showed the economy contracted 4.2 per cent year on year in the fourth quarter of 2022, after an unexpectedly bigger decline of 4.6 per cent in the previous three months.

The fall in gross domestic product (GDP) – for the fourth quarter in a row – was mainly attributable to the continued weak performance in external trade, but the economy was expected to recover this year as Hong Kong returned to normality, the government said.

Economists, meanwhile, said they expected growth this year would increase by at least 3 per cent.

For the whole of 2022, the latest GDP forecast was for a 3.5 per cent contraction, which would be the city’s third in four years.