Author: Vera Yuen, HKU
Hong Kong was one of the last jurisdictions in the world to reopen after COVID-19 at the beginning of 2023. The ensuing economic recovery was short-lived and softer than expected. A mix of both cyclical and structural factors, including international monetary policy and geopolitical tensions, may mean the city never recovers its pre-pandemic shine.
Private consumption in Hong Kong continued to grow through the year but imports and exports remained weak. Capital investment and tourism have also been lackluster. Around nine months after the reopening, visitor arrivals were only 65 per cent of their 2018 level. Hong Kong’s asset markets are in similarly difficult positions.
Residential property prices moved up briefly at the beginning of the year but quickly lost steam and declined in the second half, with a year-to-day fall of roughly 5 per cent. The Hang Seng Index dropped over 15 per cent in 2023 and appears decoupled from the…