Hong Kong sees Q1 GDP expand by 2.7%, expects faster recovery in Q2
Published: May 03, 2023 07:02 PM
A view of a street in Hong Kong on April 1, 2023. Photo: VCG
A view of a street in Hong Kong on April 1, 2023. Photo: VCG

The Hong Kong economy saw an improvement in the first quarter of 2023, led by a strong recovery of inbound tourism and growing local market demand, official data showed.

Officials of the major Asian financial hub predicted that the second quarter could be even better, given the continued growth of the Chinese mainland economy. 

Hong Kong's GDP grew 2.7 percent year-on-year in the first quarter of 2023, ending four consecutive quarters of contractions, according to the official website of the government of Hong Kong Special Administrative Region on Tuesday. GDP fell 4.1 percent in the previous quarter. On a seasonally adjusted quarterly basis, the economy grew 5.3 percent in the first quarter.

Although exports dropped in the first quarter, faster expansion in the economy of the Chinese mainland, coupled with an acceleration of Hong Kong's aviation sector activity, will provide further support, Hong Kong Chief Executive John Lee said on Tuesday, according to Reuters. 

"Economic growth in the second quarter will be better than the first quarter," he told a regular news briefing. "The economy this year will be better than last year."

Inbound tourism and domestic demand will remain the major drivers of economic growth in 2023. Visitor arrivals should recover further as transportation capacity continues to catch up, the official website said.

The improving economic situation and prospects should boost domestic demand, though tight financial conditions will remain a constraint, it added. 

Hong Kong's economic growth is inseparable from mainland tourists. Lee estimated that tourist arrivals from the mainland totaled 600,000 during the May Day holidays.  

Cathay Pacific group, comprising passenger airlines Cathay Pacific and HK Express, reached 50 percent of pre-pandemic passenger flight capacity levels as planned, covering more than 70 destinations as of the end of March.

The company will add more flights, in particular between Hong Kong and the Chinese mainland. 

Between now and the end of October, the number of return flights will progressively increase to about 160 per week, covering 16 airports in 15 cities, including four return flights per day to Beijing, six return flights per day to Shanghai Pudong airport and nine return flights per week to Shanghai Hongqiao airport, the company said. 

Data from travel platform sent to the Global Times on Wednesday showed that outbound flight bookings during the May Day holidays recovered to 45 percent of the levels in 2019. Bangkok, Hong Kong and Seoul were the top three destinations for Chinese mainland travelers.