Hong Kong's economy recorded moderate growth in the first quarter of 2024, with real gross domestic product growing by 2.7 percent year-on-year, with the special administrative region government expecting the local economy to record further growth in the rest of the year.

The real GDP growth forecast for 2024 as a whole is maintained at 2.5 percent to 3.5 percent, Government Economist Adolph Leung Wing Sing said while presenting the First Quarter Economic Report 2024 at a press conference on Friday.

Exports of services continued to grow notably by 8.4 percent year-on-year in real terms in the first quarter, he said.

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Exports of travel services jumped further thanks to the continued revival of visitor arrivals, he pointed out. Exports of transport services continued to rise, while exports of business and other services showed modest growth, Leung added.

Exports of financial services however declined further.

Exports of goods should improve further if external demand holds up, though geopolitical tensions will bring uncertainties.

Adolph Leung, Government Economist

Data showed total exports of goods rose by 6.8 percent as external demand turned slightly more favorable.

Domestically, the labor market remained tight in the first quarter, with the seasonally adjusted unemployment rate staying low at 3 percent.

Supported by the continued increase in employment earnings and the government’s various initiatives to boost sentiment, private consumption expenditure increased mildly by 1 percent year-on-year in real terms.

The residential property market turned active in March, as market sentiment improved after the cancellation of all demand-side management measures for residential properties and the adjustments of macroprudential measures.

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The number of transactions, in terms of the total number of sale and purchase agreements for residential property received by the Land Registry, rebounded by 29 percent from a low base in the preceding quarter to 9,823 for the first quarter, with overall flat prices culminating in a 2 percent decline.

Consumer price inflation was modest in the first quarter. The underlying Composite Consumer Price Index rose by 1 percent year-on-year.  

Looking ahead, Leung said exports of services should be supported by the further revival of inbound tourism alongside the continuous recovery of handling capacity and the SAR government's efforts to promote a mega-event economy.

“Exports of goods should improve further if external demand holds up, though geopolitical tensions will bring uncertainties,” he said.

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“Domestically, rising employment earnings and the government's initiatives to boost sentiment should help private consumption, but residents' changing consumption patterns may pose challenges.”

On the inflation outlook, overall inflation should stay contained in the near term, according to Leung. The forecast rates of underlying and headline consumer price inflation for 2024 are maintained at 1.7 percent and 2.4 percent respectively, the same as those announced in the Budget, he added.