Hong Kong urged to spend ‘smarter’, after IMF backs city’s saving efforts

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.

They issued the call on Saturday, a day after a report from the UN agency lauded the local government’s efforts to create a digital finance ecosystem and a green finance landscape that would safeguard the city’s international status.

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 would likely 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.”