HK will have to cut GDP growth forecast: Paul Chan

Financial Secretary Paul Chan warned on Sunday that the government will have to cut its economic growth forecast for the year when officials announce revised projections later in the week.

Writing on his blog, Chan noted that the easing of social distancing measures and the distribution of consumption vouchers for adult residents have contributed to a more lively atmosphere across town over the past two long weekends, this won’t be enough to offset the huge blow that the fifth wave of Covid has dealt to the SAR’s economy.

“We expect the economic data to slightly improve as the epidemic gets under control and economic activities resume. But the recovery of the domestic economy takes time, and the persistent uncertainties and heightened risks in the external environment are also not beneficial to Hong Kong’s economical situation this year,” Chan said.

“So far, it looks like a downward adjustment [of our economic growth forecast] is inevitable.”

The financial chief also expressed concern over the impact of the US Federal Reserve’s interest rate hikes on people and small and medium-sized enterprises here, at a time when the economy is still recovering.

The government’s current forecast for Hong Kong’s GDP growth for 2022 is between 2 and 3.5 percent.

The SAR’s economy shrank by 4 percent in the first quarter year-on-year.