Hong Kong's Economic Growth Forecasted to Continue Amid Global Challenges

Hong Kong's Financial Secretary, Paul Chan, announced that the city's economy grew by 3.5% last year, marking a third consecutive year of growth. According to RTHK, the government forecasts economic growth of 2.5% to 3.5% for this year, with a basic inflation rate of 1.7% and an overall inflation rate of 1.8%. Looking ahead to 2027-2030, the economy is expected to grow by an average of 3% annually, with an average annual basic inflation rate of 2%. In his new budget announcement, Chan noted that by 2026, global trade tensions are expected to ease slightly, and economic activities in major economies will continue to expand. Mainland China's economy is anticipated to contribute significantly to global growth, with the country implementing proactive macroeconomic policies to boost domestic demand and promote high-quality development. This is expected to create favorable conditions for Hong Kong's economic growth. Chan highlighted that investments in new technologies such as AI will continue to drive demand for related products, supporting further expansion of trade activities in Asia. The market generally expects a reduction in U.S. interest rates, which could boost investment confidence. The International Monetary Fund predicts moderate global economic growth this year. Benefiting from these factors, Hong Kong's goods exports are expected to maintain substantial growth, while service exports will continue to rise due to increased visitor numbers and demand for financial services. Domestic demand is also expected to grow steadily. The labor market remains stable, and rising incomes are expected to drive private consumption. Improved business sentiment and anticipated interest rate cuts are favorable for asset markets and investment activities. However, Chan cautioned that the international environment remains complex, with fluctuating trade policies in major advanced economies continuing to create uncertainty in global trade. If the U.S. reduces interest rates more slowly than expected, the current optimism in global financial markets may be affected.