Hong Kong lawmakers and experts have called for “smarter” spending after the International Monetary Fund (IMF) recognised the government’s gradual financial consolidation path was appropriate for sustaining an economic recovery.
Experts also expressed scepticism on Saturday that the government would heed the UN body’s advice on broadening the tax base to sustainably pay for the rising expense of the city’s rapidly ageing society and invest in initiatives to boost economic growth.
The IMF said Hong Kong’s economy was “recovering gradually after a protracted period of setbacks” and projected gross domestic product (GDP) growth of 2.7 per cent for both 2024 and 2025.
But the organisation cautioned that the pickup in domestic demand was likely to be offset by weakening external demand, including from mainland China.
“A sharper-than-expected slowdown in mainland China, due to the escalation of trade tensions or a deeper and more protracted adjustment in the property market, would further weaken confidence,” the IMF said.
“Slowing growth in major economies will weaken external demand for Hong Kong’s services and goods.”