Hong Kong’s economy grew 2.7% in Q1 compared to the year before, according to the government on Friday, with tourism and key business and entertainment events set to boost growth for the remainder of the year.

Economic growth was recorded at 4.3% in Q4 2023, Reuters news agency reports.

“Looking ahead, the Hong Kong economy should record further growth in the rest of the year,” said a statement by government economist, Adolph Leung, who went on to add that private consumption and government support initiatives are forecast to bolster growth.

However, Leung also noted that shifts in residents' consumption patterns could present challenges, and an extended period of “tight financial conditions” might impact local economic confidence and activity.

Furthermore, on a seasonally adjusted quarterly basis, the economy expanded by 2.3% in the January-March period, compared to a growth rate of 0.2% in the October-December quarter.

The government has upheld its full-year economic growth forecast for 2024, projecting an increase of between 2.5% and 3.5%.

Hong Kong has been struggling to recover after the three-year COVID lockdown. The rebound has been hindered by a surge in residents travelling to the mainland for shopping and entertainment, citing generally lower prices and better service, the Reuters report goes on to add.

In addition, eight more Chinese cities have joined a program permitting their residents to travel independently to Hong Kong, rather than as part of a tour group, as a measure to bolster Hong Kong’s economy. This brings the total number of cities participating in the scheme to 59.