Hong Kong to stick with 2% to 3% growth goal despite strong first quarter: Chan Hong Kong will maintain its economic growth target5 of between 2 and 3 per cent for this year, the city’s finance chief has said, while describing the anticipated rapid gains in the first quarter as an “exception” rather than the norm. Financial Secretary Paul Chan Mo-po also said on Monday that authorities would “prepare for the worst” despite the easing of tariffs amid the US-China trade war, but added the recent rise in tourism would help offset sluggish domestic consumption. The government earlier set its growth forecast for the gross domestic product at between 2 and 3 per cent for the year, following a 2.5 per cent year-on-year expansion in 2024. Spending in Hong Kong remained weak, with retail sales in April dropping for a 14th consecutive month, falling by 2.3 per cent year on year to HK$28.9 billion, according to statistics released on Monday. For the first four months, retail sales were down 5.6 per cent over the same period last year. Chan told lawmakers: “The overall [economic] growth forecast has not been adjusted upwards despite [the first quarter’s] performance. “That’s because the rapid growth in the first quarter was the exception rather than the norm, and there may be wild changes in the US government’s policy. “So we have to manage our risks. We have to prepare for the worst.” Data released by the Census and Statistics Department last month showed that the economy grew by a stronger-than-expected 3.1 per cent year on year, in the first quarter, compared with 2.5 per cent growth reported for the proceeding quarter. The rapid uptick was partly attributed to a pre-tariff surge in exports. Government estimates also indicated that the city’s total exports of goods would increase by 8.7 per cent, year on year, for the first quarter, much faster than the 1.3 per cent increase seen in the fourth quarter of 2024. The figures also showed that investment had risen, while private consumption expenditure registered a small decline. Chan said there was a risk of downward pressure on global economic growth due to the “hegemony and bullying” of the US and the protectionist trade measures it had implemented. Despite a 90-day pause in the US-China trade dispute, the minister said authorities had prepared “contingency plans” based on different geopolitical scenarios and would continue supporting local businesses that could be particularly vulnerable to tariffs. While Chan acknowledged that private consumption continued to drop, he said the shrinkage had narrowed and that the situation was stabilising. When asked what the government would do to address weak consumption and foster market activity, Chan pointed to the surge in arrival numbers and pledged the city would continue to host mega-events to draw tourists. He also said the government was taking the number of shop closures seriously but noted there had been a shift in consumer spending patterns. “As market conditions change, market rents will fall and that will mean less pressure for people seeking to start their businesses,” the finance chief said. According to a survey in May of 3,000 businesses conducted by the Hong Kong Retail Management Association involving 68,000 members of staff, half of the retailers recorded a drop in business during the month. “Close to 40 per cent of respondents recorded a slight increase in business – about a single digit to a low double-digit rise – while about 10 per cent said business was on par with last year’s level,” Annie Tse Yau On-yee, chairwoman of the association, said on Monday. “For June, it does not seem like there would be circumstances where there would be a sudden rebound, but it is agreed that it is gradually becoming more stable and slightly recovering. Of course, that would be dependent on geopolitics and China-US trade factors.” Gary Ng Cheuk-yan, senior economist at Natixis Corporate and Investment Bank, said it was right for Chan to maintain the government’s previous economic growth target, as the external environment remained “highly volatile”. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3312714/hong-kong-stick-2-3-growth-goal-despite-strong-first-quarter-chan?module=top_story&pgtype=section (ICE HONG KONG)

Fonte notizia: South China Morning Post