Hong Kong expects economic growth of around 6.5% in 2021

Aerial photo taken on July 16, 2020 shows Hong Kong's Victoria Harbour. - Xinhua

HONG KONG (Xinhua): Hong Kong's economy maintains a steady recovery and is expected to record an economic growth of around 6.5 per cent this year, said Paul Chan Mo-po, financial secretary of the Hong Kong Special Administrative Region government.

Hong Kong's economic recovery benefited from its strong export and fixed investment in the first half of the year, as well as the improvement in private consumption spending, Chan said in a blog post on Sunday.

With vaccination programs processing globally, major economies resume and Chinese mainland's economy recovers steadily. According to Chan, Hong Kong's total exports surged by 30 per cent in the first half of the year, with the growth rate in the third quarter being 22.7 percent.

Hong Kong's economy has grown 7.8 per cent year-on-year in the first half of the year under its strong export and the increasing domestic demand, while trade and consumption indicators will predict a good growth impetus in the third quarter, he said.

Chan believes that the year-on-year growth in the third quarter should be lower than that of the first half of the year, due to the stronger-than-expected economic rebound in the first half and a higher base of comparison in the second half of last year.

With the epidemic under control and the issue of electronic consumption vouchers, Hong Kong's retail sales value in the first half of the year rose 8.4 per cent and the total revenue of the catering business also rebound by 0.5 per cent.

In addition, the seasonally adjusted unemployment rate substantially dropped from a 17-year high of 7.2 per cent at the beginning of this year to 4.5 per cent in the third quarter, the lowest level since the first quarter of last year, while the number of employees in the industries of retail, accommodation, and catering services saw a total increase of 3.5 per cent year-on-year in the third quarter.

Looking ahead to the fourth quarter, Chan noted that Hong Kong's export growth rate is expected to slow down as the global economic growth has already reached its peak, while employment and income situations will improve coupled with the effect of the consumption voucher scheme.

However, Chan stressed that external risk factors such as the pandemic, high commodity prices as well as rising external inflation must not be ignored.

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