Citi has again raised its forecast for Hong Kong's gross domestic product growth this year by 0.2 percentage points, now projecting year-on-year growth of 3.2 percent.
This marks the second upward revision within half a month, bringing the cumulative increase to 0.7 percentage points, the bank said in a report.
Citi said that Hong Kong's economy continued to recover in the previous quarter, with strong investment growth and steady improvement in consumption driving domestic demand well beyond expectations.
Since the start of the year, the bank has become more optimistic about Hong Kong’s economic outlook, noting a broad-based recovery across sectors including finance, property and retail.
The residential property prices are expected to rise by 8 percent this year, while the Hang Seng index could climb to 28,800 points by the end of June and reach the 30,000-point level by year-end.
Citi expects the government's 2026-27 Budget announced later this month, to focus on supporting underperforming sectors. The bank added that some weaker areas require structural adjustments, including challenges faced by small and medium-sized enterprises in transitioning to new trade and consumption models and insufficient upgrades in artificial intelligence.
It also noted that the retail sector continues to face declining foot traffic at physical stores and rising competition from mainland e-commerce platforms, while risks related to non-performing loans in the commercial property sector remain.
Cynthia ZHONG
