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ECONOMY | Staff Reporter, Hong Kong
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Economy expected to moderate at 3% in 2018

The slowdown in China’s growth may drag economic expansion.

After three quarters of sustained robust performance in 2017, the Hong Kong economy is expected to moderate at 3% YoY in 2018 as high comparison and a likely slowdown in China’s economy are poised to slow down expansion over the next 12 months, according to Citi Research Asia Economic Outlook & Strategy.

The Markit Purchasing Managers Index (PMI), a leading indicator of economic health, has also displayed slower improvements in the service industries last October.

Citi expects the first half of 2018 to grow at 2.7% YoY which will rally to 3.3% in the latter half of the year as growth drivers will shift to small net exports of goods and services surplus.

High levels of private consumption are also expected to dip in 2018.

Similarly, the retail sector is unlikely to make further breakthrough next year as retail businesses are still likely to face high rents and selective customers.

The property sector’s momentum following government initiatives to restructure the housing markets will similarly fizzle by the second half of 2018 as rising prices and lack of supply continue to hamper reforms.

However, public sentiment remains hopeful as Hong Kongers waits for the completion of a government study on the proposal to convert farmland and brownfield sites for residential developments which is expected to be published by mid-2018. 

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