Hong Kong economy to post solid growth for first quarter: Paul Chan Hong Kong’s finance chief has predicted the economy will post solid growth for the first quarter, while pledging to press on with plans to control government spending to maintain the city’s competitiveness. Financial Secretary Paul Chan Mo-po gave his forecast on Sunday in the lead-up to this week’s announcement of gross domestic product (GDP) figures for the quarter. He said the economy had benefited from the increase in arrivals and exports between January and March, but warned of uncertainties in the global outlook amid an ongoing trade war. “Driven by these positive factors, the advance estimates on GDP for the first quarter of 2025 to be released this week are expected to be robust,” he said in his weekly blog. “But looking ahead, the bullying acts and the unilateral protectionism of the United States will continue to haunt the global economic outlook.” Chan said the number of tourists in the first quarter had increased by 9 per cent year on year to 12.2 million, thanks to a series of mega-events and large-scale international meetings that boosted the performance of the retail and catering sectors. The number of non-mainland Chinese visitors reached 2.98 million, an 18 per cent rise compared with the same period last year. The figure for mainland tourists also increased by 6 per cent. Chan said he expected that the city would welcome about 840,000 mainland arrivals in the May Day “golden week” break. The holiday runs from May 1 to 5 on the mainland. Chan highlighted the growth in exports in the first quarter despite the escalating trade war, with strong figures for multiple markets including the mainland and members of the Association of Southeast Asian Nations. Exports to the US also recorded a mild increase, he said. But Chan warned that the city would be affected by wider market tensions, noting that the International Monetary Fund (IMF) last week slashed this year’s global economic growth estimate by 0.5 percentage points to 2.8 per cent. The forecast was significantly lower than the average annual growth rate of 3.7 per cent in the two decades before the Covid-19 pandemic, he said. The IMF also warned that trade frictions would disrupt global supply chains, suppress consumption and investment, and exacerbate financial market volatility. Chan said Hong Kong had to remain vigilant, manage risks and accelerate efforts to promote the economy in the face of a complex and ever-changing external environment, even as the city received support from the mainland to battle the headwinds. “While speeding up economic development, we must also firmly advance our fiscal consolidation plan to ensure the soundness and sustainability of public finances,” he said. In February’s budget, Chan announced measures to balance the books by strictly controlling government expenditure and increasing revenue based on the “user-pays” principle and the “affordable user-pays” principle. “This process will inevitably require trade-offs, but we have ensured the attractiveness and competitiveness of Hong Kong’s business environment and have minimised the impact on the overall society as much as possible,” he said. Dr Lee Shu-kam, head of Shue Yan University’s department of economics and finance, agreed with Chan’s analysis and believed the city’s economy could have seen steady growth in the first quarter. But he warned against “getting happy too early” given that the effects of the US-initiated tariff war would start being seen from the second quarter. “It affects the global economy, including the US economy. Hong Kong’s exports will slow down. Unless we can explore more new markets to make up for the loss, our economy is going to suffer,” Lee said. He estimated Hong Kong could still achieve 2 per cent GDP growth for the full year, the low point of Chan’s previous full-year forecast of between 2 and 3 per cent. Former secretary for financial services and the treasury Ceajer Chan Ka-keung, meanwhile, told a radio programme that Hong Kong should strengthen its role as a “superconnector” to link the mainland with other markets amid the US-China trade war. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3308083/hong-kong-economy-post-solid-growth-first-quarter-finance-chief-paul-chan (ICE HONG KONG)

Fonte notizia: South China Morning Post