Financial Secretary Paul Chan on Sunday said stimulating consumption is the key to a stable economy, while warning of external headwinds that could hinder recovery.

Writing on his official blog, Chan said the fresh round of spending vouchers and the "Happy Hong Kong" campaign will work together to bolster domestic demand.

The finance chief added that while the rebound in retail sales in the first quarter gave signs for optimism, the external environment will remain uncertain.

"Looking ahead to the second half of the year, despite the steady progress of economic recovery, we still need to be vigilant against uncertain factors and challenges in the external environment," he wrote.

"Weak external demand and ongoing political disruptions to the global supply chain will continue to weigh on Hong Kong's export performance."