AFTER a near-certain contraction last year for the third time since 2019, Hong Kong’s economy is coming back stronger this year and may even grow faster than rival financial hub Singapore for the first time in more than a decade.

Economists are upgrading their forecasts for Hong Kong this year as the city accelerates its reopening with the Chinese mainland and the rest of the world.

The median estimate in a survey of 12 economists last week was 3.3% growth for 2023, higher than the 2.7% forecast in a survey of 25 economists in November.

Analysts are becoming more optimistic as Hong Kong sheds its remaining COVID curbs and rolls out a plan to allow people to more freely cross the mainland border again. The mainland Sunday ended quarantine for arrivals, making cross-border travel a reality again for many people.

An influx of arrivals would be good news for the city to revive businesses that have been hurt by the closure, from hotel and catering firms to investment and wealth management firms.

The mainland border reopening has been cautious so far. with officials implementing a 60,000-person cap per day. But the gradual pace of recovery may give way to a stronger showing in the final six months of the year.

“We see Hong Kong turning the corner, but the real effects are likely to be seen only in the second half of 2023,” said Heron Lim, an economist at Moody’s Analytics.

He expected Hong Kong’s economy to expand 3.8% this year, compared with a November estimate of 3.2%.

Lim sees quarterly growth reaching 7.7% in the October-to-December period.

Hong Kong officials have said they think GDP shrank 3.2% last year. The economy of Singapore, which has been trying to gain an edge over its Chinese competitor for top talent and business, expanded 3.8% in 2022.

Growth in trade-reliant Singapore is projected to level off this year as the United States and Europe head for likely recessions, with the most recent estimate in a Bloomberg survey showing the city state will expand 2%.

If Hong Kong grows at a faster pace than that, it would surpass Singapore for the first time since 2008.

Economists who participated in the most recent Hong Kong survey expect the city to turn to fiscal support and other measures to shore up growth this year. (SD-Agencies)