Hong Kong pins hopes on policy shift to hit 2.5% GDP target

Private residential property prices declined by 5.4% in 4Q23.

Hong Kong has set a 2.5% growth target for its gross domestic product (GDP) for 2024 after falling behind expectations with a 4.3% growth in the fourth quarter of 2023 (4Q23).

A major policy shift was enacted in February by scrapping property demand-side management measures in response to private residential property prices dwindling to 5.4% in 4Q23.

“As interest rates in the developed economies are widely expected to fall in the second half of 2024, this will also contribute to a better outlook for external demand and domestic investments.” Stephen Li, Head of Global Markets, Greater China, UOB, said.

“The stabilisation in the assets markets, wage growth and favourable labour market conditions will be positive for private consumption.” Li added.

Key factors that contributed to the previous year's growth was the low base of comparison in the year ago period, particularly for gross domestic fixed capital formation and goods and services exports.