Hong Kong economic growth slows in second quarter after rebound

Hong Kong’s economy expanded by 1.5 percent in the second quarter, data released Monday showed, indicating slowing growth after a robust start to the year.

Vast swathes of Hong Kong’s economy were shut down in 2022 as the government grappled with a deadly Covid wave by imposing travel restrictions and banning large gatherings around the city.

People look at items for sale on Tung Choi Street's Ladies Market, a popular Hong Kong tourist attraction, on July 5, 2023. Photo: Kyle Lam/HKFP. — People look at items for sale on Tung Choi Street’s Ladies Market, a popular Hong Kong tourist attraction, on July 5, 2023. Photo: Kyle Lam/HKFP.

After its reopening, the economy bounced back in the first quarter, growing by 2.7 percent on year.

But the “momentum softened on the back of the strong rebound in the preceding quarter,” a government spokesman said Monday in a statement.

Imports and exports posted double-digit declines over the period, decreasing by 16.1 percent and 15.3 percent respectively, the data showed.

Private household spending grew by 8.5 percent, down from last quarter’s 13 percent increase.

Finance Secretary Paul Chan had warned in a blog posted Sunday that Hong Kong’s economy “may be slightly slower” than the three months before.

People on the street in Hong Kong on February 13, 2023. Photo: Kyle Lam/HKFP.

He attributed the slowdown in household spending to changes in consumer habits after three years of pandemic living, but said the economy was still on track to improve.

“Looking ahead, inbound tourism and private consumption will remain the major drivers of economic growth for the rest of the year,” said the government spokesman.

“The improving economic situation and prospects should bode well for domestic demand, though tight financial conditions may impose constraints.”

Hong Kong entered a deep recession in 2019 and 2020 after the former British colony was roiled by pro-democracy protests and the start of the pandemic.

The city found brief respite in 2021, as its strict Covid-19 controls largely kept it virus-free, with the economy rebounding by 6.4 percent — gains that were later wiped out by the 2022 outbreak.

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