Hong Kong’s GDP sees 2.7% growth in the first quarter of 2023

Hong Kong’s gross domestic product (GDP) has grown 2.7% in the first quarter of 2023, as compared to the 4.1% economic contraction in the previous quarter, said chief executive John Lee ahead of the official release of data.

Lee said at a press briefing on 2 May that a series of large-scale promotional events boosted tourism and improved the local economy.

“Although exports continued to decline in the first quarter, with the continued rapid growth of the economy in mainland and the accelerated recovery of Hong Kong's aviation capacity, I believe that the economy in the second quarter will be better than the first quarter, and this year's economy will definitely be better than last year.” Lee said.

Official figures from The Census and Statistics Department (C&SD) released on 2 May also confirmed that Hong Kong's GDP increased by 2.7% in real terms in the first quarter of 2023 over a year earlier due to the visible increase in domestic demand, ending four consecutive quarters of declines. On a seasonally adjusted quarter-to-quarter basis, real GDP surged by 5.3%. 

Analysed by major GDP component, private consumption expenditure increased by 12.5% in real terms in the first quarter of 2023 over a year earlier, much faster than the increase of 1.7% in the fourth quarter of 2022. Government consumption expenditure measured in national accounts terms grew by 0.5% in real terms in the first quarter of 2023 over a year earlier, after the increase of 9.1% in the fourth quarter of 2022.

Over the same period, total exports of goods measured in national accounts terms recorded a decline of 18.7% in real terms from a year earlier, after the decrease of 24.9% in the fourth quarter of 2022. Imports of goods measured in national accounts terms fell by 14.5% in real terms in the first quarter of 2023, compared with the 22.9% decline in the fourth quarter of 2022.

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A government spokesman said that the improvement of Hong Kong economy in the first quarter of 2023 was led by the strong recovery of inbound tourism and domestic demand. 

"Looking ahead, inbound tourism and domestic demand will remain the major drivers of economic growth this year. Visitor arrivals should recover further as transportation and handling capacity continue to catch up. The improving economic situation and prospects should boost domestic demand, though tight financial conditions will remain a constraint. The continued improvement of the labour market and the disbursement of a new round of consumption vouchers will render further support to private consumption," said the spokeperson.

The spokesperson added that exports of goods would continue to face significant challenges. While slower growth in the advanced economies would continue to weigh on external demand, the faster recovery of the mainland economy will provide some relief.

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