The government announced on Friday that Hong Kong’s economy grew 2.7 percent in the first quarter from a year earlier, ending four consecutive quarters of contractions.

Authorities also said they're expecting growth in 2023 to be near the higher end of their forecast range of 3.5 percent to 5.5 percent.

Looking forward, the government said inbound tourism and domestic demand will remain the major drivers of growth this year.

It added that the continued improvement of the labour market, the disbursement of consumption vouchers, and a series of "Happy Hong Kong" events will provide additional support to private consumption.

It said the economic rebound may see overall inflation pick up in the rest of 2023, though remaining largely moderate.

Meanwhile, HSBC raised its annual economic growth forecast on Hong Kong from 3.8 percent to 5 percent, thanks to a strong start in the first quarter this year.

It said the pace of the rebound is being driven by a strong revival in local consumption, as well as a recovery in the number of mainland visitors.

The bank is expecting these tailwinds to remain strong in the coming quarters, helping to lift GDP growth for this year.