Hong Kong’s GDP saw an increase of 7.8 percent in the first quarter this year, substantially beating market expectations of around 3.7 percent and ending six straight quarters of growth decline, according to data released by the government of the Hong Kong Special Administration Region (HKSAR) on Monday.
“Hong Kong’s economy recovered significantly in the first quarter of 2021, which should be attributed to the strong growth of goods exports under the global economic recovery led by the Chinese mainland and the US,” an HKSAR government spokesman said.
The 7.8 percent growth was the best performance for the HKSAR economy in 11 years and a significant rebound from the 2.8 percent contraction in the previous quarter and a record 9.1percent decline in the first quarter last year. It also marked the end of the longest recession for the HKSAR economy.
The better-than-expected data on Monday also came as residents in the HKSAR have a slightly better confidence in the city’s economic outlook.
For the first time in the past six years, fears of an economic recession have dropped from over 70 percent to this year’s 67.7 percent, according to a survey released by the Chinese University of Hong Kong on Monday on the current economic situation and outlook in Hong Kong.
Meanwhile, more than 40 percent of Hong Kong residents surveyed said they were “very worried” or “worried” about losing theirs or their family members’ jobs amid the pandemic, while 46.8 percent said they were not.
The economic recovery has been uneven, and overall economic activity remains below pre-recession levels, as the pandemic continues to hit individual segments of the economy, said the spokesperson, adding that the global economic recovery should benefit Hong Kong’s exports in the short term.
Service exports should also improve, although the recovery of tourism-related activities is expected to be slow given the lingering pandemic in many parts of the world. Other risk factors, such as China-US relations and geopolitical tensions, are also worth watching.
Earlier on Monday, Ma Xiaowei, director of the National Health Commission, said that the central government is monitoring Hong Kong’s coronavirus epidemic situation closely, and will assist the city to elevate testing capability, urging the city to accelerate vaccination and lower local cases to zero to resume normal travel with the Chinese mainland.
“In 2021, the impact of the pandemic on Hong Kong’s economy is likely to wane with the introduction of vaccination in Hong Kong and the strengthening of global pandemic prevention and control,” Wang Peng, an assistant professor at Renmin University of China, told the Global Times.
By Sunday, a total of 1.49 million doses of vaccine have been administered to the public in Hong Kong, according to data from the HKSAR government.
“From a long-term perspective, there’s a lot of good news for Hong Kong’s economic development in 2021, including the construction of China’s Guangdong-Hong Kong-Macao Greater Bay Area, which will enter its faster construction stage in 2021, and thus will be more favorable for policies,” said Wang.
Leung Chun-ying, former chief executive of the HKSAR, said on Monday during a seminar that the opportunities that the 14th Five-Year Plan 2021-25 will bring to Hong Kong in the next five years may be the last for Hong Kong people, urging residents to seek new businesses under the plan.
Leung said that some areas on the mainland that are considered to be remote and poor are developing better than certain parts of the HKSAR and that the Hong Kong society should study and find opportunities under the Five-Year Plan.
To further stabilize the economy, the HKSAR passed the Appropriation Bill 2021 on April 28, allowing a deficit budget of over HK$100 billion ($12.87 billion), according to Hong Kong Financial Secretary Paul Chan Mo-po on Sunday.
Chan said in a blog post that following the passage of the bill, supportive measures will be rolled out at full speed to help residents and businesses to further ease pressure from epidemic prevention measures.