Hong Kong economic growth to match Singapore since 2008

Hong Kong's economy is showing signs of improvement and it is expected to match Singapore's for the first time since 2008, according to a Bloomberg study. A Bloomberg report said economists had raised their growth forecasts for Hong Kong by 0.7 percentage points to 6.7% this year, while Singapore's economic growth outlook was upgraded to 6.5%.  

The Bloomberg report cited an economist at corporate and investment bank Natixis in Hong Kong, who said that Hong Kong’s economy will continue to enjoy its cyclical rebound in 2021, especially the eVoucher Scheme can add to GDP growth by 0.5%. Previously, the Hong Kong government's economist Andrew Au said the city's economy should stay on the path to recovery for the rest of 2021, adding that the ongoing global economic recovery should continue to support Hong Kong’s exports of goods in the rest of 2021 - despite there being some moderation from the exceptionally strong growth in the first half of this year.

Au also expected a number of factors that could contribute to the city's economic recovery, including the well-contained COVID-19 situation, the improving labour market conditions, coupled with the boosting effect of the eVoucher Scheme. These events are expected to help stimulate consumption sentiment further and lend support to consumption-related sectors in the second half of 2021. 

Hong Kong's economy is recovering according to the latest figure from the city's Census and Statistics Department, with the gross domestic product (GDP) growing by 7.6% in Q2 2021 over a year earlier due to the improving global economic conditions and the impact of COVID-19 on Hong Kong's economy started fading away. However, Hong Kong's economy may not perform as well as Singapore's in 2022, as Singapore's growth is estimated at 4.1% in 2022 compared with Hong Kong’s 3%, according to the survey. The trend is expected to continue in 2023 as well. 

On the other hand, in August, The Ministry of Trade and Industry of Singapore upgraded the city state's GDP growth forecast for 2021 to 6 to 7% from 4 to 6% in May. The Singapore government said its economy is expected to continue to see a gradual recovery in the second half of the year, supported in large part by outward-oriented sectors. The progressive easing of domestic and border restrictions, coupled with Singapore's increasing vaccination rates, will also help support the recovery of the state's consumer-facing sectors and alleviate labour shortages in sectors that are reliant on migrant workers. Nonetheless, cautiously, the Singapore government said downside risks in the global economy remain. For example, there continues to be uncertainty surrounding the trajectory of the COVID-19 pandemic, as well as higher-than-expected inflation and geopolitical uncertainty involving major economies. 

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