Hong Kong economy to grow faster, Singapore to slow: survey

HONG Kong’s economy is expected to grow faster than previously forecast this year as consumer spending rebounds, while growth in rival financial hub Singapore is likely to slow as global demand weakens.

The latest Bloomberg survey of economists, conducted Jun 1-7, shows growth in Hong Kong will come in at 4.6 per cent in 2023, up from a previous estimate of 3.4 per cent. Singapore’s gross domestic product is projected to expand 1.4 per cent, down by half a percentage point, according to the survey.

“Hong Kong’s economy continues to see a consumption-driven rebound supported by tourism, boosting its short-term cyclical prospects,” said Gary Ng, a senior economist at Natixis. Still, there are risks to the outlook from a slowdown in the global economy and rising interest rates, he said.

Economists raised their second-quarter growth forecasts by 1.7 percentage points to 3.3 per cent in the latest survey. The economy is then expected to expand 6.7 per cent in the third quarter and 7.1 per cent in the final three months of the year.

In Singapore, it’s possible the economy may enter a technical recession in the first half of 2023, largely driven by the weakness in manufacturing, according to Alvin Liew, a senior economist at United Overseas Bank. A recession is usually defined as two consecutive quarters of quarter-on-quarter contraction in gross domestic product.

Forecasts for headline consumer inflation for Singapore were raised through to next year, with economists now predicting 5 per cent for the full year, up from 4.7 per cent previously, and 3.1 per cent for 2024, compared with 2.8 per cent in the previous survey. Hong Kong’s inflation expectations were unchanged in the survey, at 2.4 per cent and 2.3 per cent for this year and next, respectively. BLOOMBERG