Aiden He
Hong Kong’s economic recovery was slower than expected in the third quarter of 2023 and a full-year growth target of 4 to 5 percent will be hard to achieve, top officials have warned.
Although the gross domestic product figure continued to rise in the three months, year-on-year growth rate was weaker than estimated, as a persistently difficult external environment kept the economy under pressure, Financial Secretary Paul Chan Mo-po said.
As a small open economy, Hong Kong will continue to be affected by factors that include worsening geopolitics and tightening financial conditions, Chan said on his blog yesterday, ahead of the release of official GDP data tomorrow.
Economists predicted a rise of 5.2 percent for the September quarter. And officials have narrowed their growth forecast for the full year to 4 to 5 percent from 3.5 to 5.5 percent earlier, after the second-quarter GDP climbed just 1.5 percent from a year ago, missing estimates of a 3.5 percent rise.
Chief Executive John Lee Ka-chiu felt it is challenging to achieve the growth target this year amid global headwinds.
Lee still believes the economy would expand in 2023 and pleaded to work on four fronts to help boost growth: consumption, investment, government spending and exports.
Speaking on a televised program, Lee also said the “spicy measures” target housing speculation instead of prices.
He added the role of the government is not to control prices but to inform of public housing policies and future supplies and let people make their own decisions. But he declined to comment if authorities will restore cooling measures once prices pick up, saying prices are sensitive and he would not assess anything that had not happened.
Chan emphasized that it will be more appropriate for prices to be adjusted by market supply and demand as long as there is no banking or confidence crisis.
Home prices are affected by multiple factors but for most people a home is still unaffordable, he noted.
”That’s why increasing the number of subsidized housing is important so more people can live better,” Chan said.
Home prices have slumped 17 percent from their peak in September 2021. To revive the market, Lee and his administration have halved the stamp duties for nonlocals and those who are not first-time homebuyers and shortened the period sellers needed to pay tax from offloading properties.
Chan said authorities are not worried about the impact of the downward adjustment of the property market on land sale revenue despite warning of a possible deficit of more than HK$100 billion in the fiscal year ending March. That compared to a deficit of HK$54.4 billion estimated in February.
Chan has attributed the decline in revenue to the sharp drop in income from stamp duties and land sales.
Even with fiscal reserves of over HK$700 billion, authorities will not put all the funds into mega infrastructure, Chan added. Instead, a committee to assess the feasibility of inviting private investors for these projects will be set up.
aiden.he@singtaonewscorp.com
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