Standard Chartered Bank has raised its full-year economic growth forecast for Hong Kong from 2.2 percent to 2.8 percent to reflect the improved business sentiment last quarter.
The new projection is near the upper end of the government’s 2–3 percent forecast. The bank also upgraded its third- and fourth-quarter growth forecasts to 3.2 percent and 1.8 percent, respectively — both one percentage point higher than its previous estimates.
Trends in the third quarter, including a steady export growth in July and August, continued recovery in retail sales, active financial markets, and signs of stabilization in the property market indicate that a relatively stable external environment has provided a positive boost to economic growth, the bank said.
While China-US trade tensions have resurfaced over issues such as the entity list, port fees, and rare earth supply, Standard Chartered believes the risk of tit-for-tat retaliation — similar to that seen in April — remains low. It expects continued dialogue and a possible meeting between the two countries’ leaders later this month could extend the current trade truce and lead to further agreements.
Still, the bank cautioned that Hong Kong’s fourth-quarter growth faces headwinds from prolonged US-China friction, the fading front-loading export effect, and lagging impacts on the labor market. However, China’s steady 4.9 percent growth outlook and supportive government policies should help cushion some of these challenges, the lender added.
