Under mounting external pressures, Hong Kong’s economic growth moderated in the latter half of last year.

Financial Secretary Paul Chan made the statement in his 2019-20 Budget speech today, saying Hong Kong’s economy grew 3% in 2018, higher than the trend growth rate of 2.8% over the past decade.

Total employment sustained growth and salaries increased continuously in real terms, with the jobless rate remaining at 2.8%, the lowest level in more than 20 years.

Mr Chan said as the uncertain global economic outlook this year will restrain the city’s economic performance, he forecasts economic growth of 2% to 3% for Hong Kong this year. 

He also noted that the International Monetary Fund lowered its global economic growth forecast for 2019 twice in the past five months, indicating that the slowdown risks should not be ignored. 

With inflation to remain moderate this year, Mr Chan expects headline inflation and underlying inflation for 2019 to be at 2.5%.

For the medium term, he has forecast an average growth rate of 3% per year in real terms from 2020 to 2023, slightly higher than the trend growth rate of 2.8% over the past decade.

Meanwhile, the underlying inflation rate is expected to average 2.5%.

He said this forecast is made on the assumption that there are no severe external shocks during the period. But the external environment is still impeded by headwinds, and if these persist in 2020 or beyond or even aggravate, global economic growth will be hindered, and Hong Kong’s economy will in turn be affected.

He cautioned that Hong Kong has to stay vigilant.