“However, the external environment remains complex and there are many uncertainties,” Zhang said in his weekly blog. “The US Federal Reserve kept interest rates on hold last week. Combined with stubborn inflation, market expectations for rate cuts are weaker than they were earlier this year.”
He said the situation “could have a negative impact on global economic recovery, Hong Kong’s exports, local investment and capital market sentiment.”
The Fed announced last week that it would keep its benchmark lending rate unchanged at 5.25% to 5.5% as core inflation remains above its 2% target.
Mr Chan said the city’s tourism sector was one of the main drivers of the economy in the first quarter, but warned of the downside of the appreciation of the Hong Kong dollar, which is pegged to the US dollar.
He said the number of arrivals during the first three days of the Labor Day “Golden Week” holiday reached nearly 650,000, a 25% increase compared to last year’s numbers.
The holiday period runs from May 1st to May 5th on the mainland.
He said “changing consumption patterns of local residents and tourists” coupled with a stronger Hong Kong dollar could hit the retail and catering sectors in particular.
Mr Chan urged companies to develop new products and leverage technology.
Minister of Finance Paul Chan attended the annual meeting of the Asian Development Bank Board of Directors in Tbilisi, Georgia. Photo: ISD
“New products not only meet the changing needs of consumers, they can also create demand and increase sales,” he said. “When it comes to new management methods, businesses can reduce costs and increase efficiency by further implementing digital solutions.”
Mr. Zhang was attending the annual meeting of the Asian Development Bank Board of Directors in Tbilisi, Georgia, whose theme was “From Billions to Trillions – Accelerating Private Sector Development Against Climate Change.” .
He said many participants were interested in Hong Kong’s digital economy development, innovation and technology sector.
Mr. Chan told the plenary session that there is a huge funding gap of trillions of dollars in climate change and transition investments, as well as climate finance support for developed and developing countries.
He called on members to work together to mobilize private sector resources and channel funds to support green and climate change projects through innovative financial products and services.
In his weekly blog post, Chan noted that Hong Kong’s gross domestic product (GDP) has increased for five consecutive quarters, expanding by 2.7% year-on-year in the first three months of this year.
The city’s benchmark Hang Seng Index has also risen almost 14% in recent days, with the property market becoming more active after authorities scrapped cooling measures in February.
