The Bank of China Hong Kong released a new research released Tuesday by the Bank of China Hong Kong said the Hong Kong economy is projected to grow mildly by 2.8 percent in 2023, reversing last year's downward trajectory in spite of an almost certain global recession.
The bank said it is still factoring in the pickup in economic activities and does not rule out the possibility of upgrading its initial estimate because of its upbeat assessment mainly due to the reopening of the border with the Chinese mainland.
Since Jan 8, 60,000 people have been allowed to travel by seven control points to and from Hong Kong and the mainland without having to undergo a period in quarantine. The cross-border high-speed railway service resumed on January 15.
The resumption of the quarantine-free travel between Hong Kong and the Chinese mainland will give full play to the role as a super-connector steering its economic growth back on track, said Qu Kang, deputy general manager of the Strategic Planning Department at Bank of China Hong Kong The Asian financial hub suffered a rough year due to global headwinds last year. The Hong Kong Special Administrative Region government cut its full-year forecast for 2022 to a 3.2 percent contraction after the city's GDP fell for three straight quarters.
Qu cautioned that Hong Kong's export outlook will continue to reel from geopolitical tensions and the global economic downturn amid major central banks monetary tightening and the lagged impact of interest rate hikes.
Global fund managers were in Hong Kong and hoovering up Hong Kong-listed shares because of the bullish mood. The benchmark Hang Seng Index has risen more than 7 percent to 21,577 as of Tuesday. It was 64 from the beginning of the year.
Ding Meng, senior economist at the Bank of China Hong Kong, described the bonanza in Hong Kong's stock market as a normalization of valuations with subsequent rallies hinting on the overall economic recovery.
It is reasonable to see the Hang Seng Index float between the range of 22,500 and 25,000 points this year, Ding added.