Budget 2023: FS Chan believes HK’s economy will rebound in 2023

He predicts the economy to grow by 3.5 to 5.5% for the whole year.

Whilst Hong Kong is bound to be negatively hit by global factors such as the sharp tightening of monetary policy, and heightened geopolitical tensions, Financial Secretary Paul Chan still believes the city will still be able to rebound in 2023.

In his budget speech, Chan said Hong Kong can capitalise on its distinct advantages under the “one country, two systems” principle.

Chan said the accelerated growth of the Mainland economy coupled with the lifting of restrictions on cross-boundary truck movements should alleviate part of the pressure on its exports from a further weakening of growth momentum in advanced economies.

He added that with the removal of quarantine requirements for inbound travellers and the normal cross-boundary travel between Hong Kong and the Mainland, the number of visitor arrivals in the city will likely see a strong rebound.
 
Chan also believes that private consumption will increase domestically as overall economic sentiment improves in tandem with the revival of economic activities and the rapid return of Hong Kong’s exchanges with the Mainland and the world to normalcy.
 
“Having regard to the above factors, I forecast that the Hong Kong economy will see a visible rebound this year with growth of 3.5 to 5.5% for the year as a whole,” said Chan.

“In respect of prices, domestic cost pressures will increase alongside the economic recovery. Despite some moderation, external price pressures will remain notable this year. Taking all factors into account, I forecast that the underlying inflation rate and the headline inflation rate will rise to 2.5% and 2.9%, respectively, this year,” Chan added.