Hong Kong economy grows 2.7% in Q1 after disastrous 2022

HONG KONG – Hong Kong's economy grew in the first quarter of 2023, the city's leader said on Tuesday, ending a disastrous year-long spell in which the finance hub was effectively closed for business over pandemic restrictions.

Chief Executive John Lee said gross domestic product expanded 2.7 per cent, reversing contractions in the previous four quarters, including a 4.2 per cent drop in the last stretch of 2022.

“A series of large-scale promotional events have boosted tourism and consumption and improved the economy,” he noted at a press briefing.

“As the mainland economy continues to grow at a fast pace and local aviation capacity speeds up its recovery, I believe Hong Kong's economy in the second quarter will be better than that of the first.”

The territory recorded one of the world's highest per capita Covid-19 death rates as it dealt with a wave of the highly transmissible Omicron variant early last year.

A series of restrictions on travel and social gatherings saw chunks of its economy shut down and exports dwindle, leading to a drop in GDP in all four quarters in 2022.

At the beginning of 2023, Hong Kong's finance chief unveiled a US$97 billion (S$130 billion) budget aimed at resuscitating the city's fortunes.

The measures included handouts for more than six million people, tax breaks, welfare allowances and a campaign to revive tourism in the city.

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

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