Hong Kong's first quarter gross domestic product increased 7.8% year on year, government data released Monday showed. That was more than double consensus estimates and ended six consecutive quarters of decline.
The city's financial secretary Paul Chan has forecast between 3.5% and 5.5% growth for the full year.
"We are confident that with the impressive improvement on the trade side and the gradual recovery of domestic consumption, the gross domestic product for the first quarter of this year will give us a relatively strong position," Chan told the city's legislative body.
In April, exports from the special administrative region grew 26.4% compared with March 2020 while imports rose 21.7% to reach $436.1 billion, in part owing to a strong pandemic-induced base effect.
Growth dropped a record 9.1% in the first quarter of 2020 as the first COVID cases began appearing. Hong Kong authorities quickly initiated lockdowns and social distancing to reduce transmissions that helped dampen economic activity.
"The sharp rebound in the first quarter mainly reflected the very strong growth of exports of goods amid the global economic recovery led by mainland China and the U.S.," a government representative said Monday.
While the city reported higher gross domestic product growth than expected, Hong Kong still faces pandemic-related hurdles before the economy fully heals.
Vaccination rates remain low despite the treatment available to everyone aged 16 and older the city's mandatory 21-day hotel quarantine - the longest in the world - continues to deter tourism.
Hong Kong's gross domestic product growth in the first quarter of 2021 is the best since the same period of 2010.
"Even after accounting for base effects the economy expanded impressively thanks to the strength of exports. With the virus situation under control, we think the recovery will continue to gain momentum over the coming quarters," Capital Economics said Monday.
"The breakdown of the gross domestic product data shows that the stronger-than-expected improvement was due in large part to the continued strength of the exports sector. Growth in goods exports soared from 5.5% on year in the fourth quarter to 30.6% last quarter. It rose a solid 12.2% in seasonally-adjusted on quarter terms with the authorities pinning much of the strength on 'the global economic recovery led by the mainland and the U.S.,'" Capital Economics assistant economist Sheana Yue said.
"The near-term outlook continues to brighten now that the latest outbreak has been largely contained and restrictions are being eased. What's more, vaccination rates have picked up in recent weeks. If the virus situation remains under control, consumption will almost certainly be stronger this quarter than last," she said.
