Hong Kong’s economy grew at a better-than-expected rate of 2.7 percent in the first quarter, partially boosted by the steady rise in exports of goods and services.

However, that growth was lower compared with the 4.3 percent figure seen in the last quarter of 2023, according to official data released by the Census and Statistics Department.

Earlier, the city’s finance chief indicated that first quarter growth would be in line with the projected full-year growth range at between 2.5 and 3.5 percent for 2024.

Commenting on the latest figures, Simon Lee, honorary fellow at Chinese University's Asia-Pacific Institute of Business, said the number was better than expected, but noted the momentum might not be sustainable in the coming quarters.

“My original estimate [for the first quarter] was about one to two percent growth. But the 2.7 percent growth also came on a relatively low base in the first quarter last year when the borders just opened and economic activities were just reactivated,” Lee told RTHK.

“We see that it’s quite remarkable in terms of exports and imports of goods and services [in the first quarter]… but if you look at local consumption… quite a number of local people went elsewhere for spending and this will have a significant effect on the GDP growth.”

“[Although] exports tend to do well at the end of the year, there are also variable factors, such as the economic situation on the mainland and geopolitical issues, so I am still quite cautious on the full-year growth,” he added.

Lee warned Hong Kong could see growth slow to about one or two percent in the coming quarters.

Analysing the major economic components, the growth of private consumption, capital formation, as well as the imports of goods and services all slowed during the three-month period.

However, exports of goods increased by 6.7 percent year on year, significantly higher compared with the 2.8 percent growth seen in the final quarter of 2023.

Exports of services rose by a notable 8.1 percent year on year in the quarter, although the pace was much slower compared with the 21.2 percent growth seen in Q4 2023.

“Looking ahead, exports of services should be supported by further revival of inbound tourism alongside the continued recovery of handling capacity and the government's efforts to promote a mega event economy,” a government spokesperson commented.

“Domestically, rising household income and the government's initiatives to boost sentiment should help private consumption, but the changing consumption pattern of residents may pose challenges. [And] a longer period of tight financial conditions may have some dampening effects on economic confidence and activities,” the spokesperson added.