Pandemic hits Hong Kong economy again

Morgan Stanley said that due to "the fifth wave of the epidemic has not been quickly contained" and "the Federal Reserve has turned hawkish", it will lower its forecast for Hong Kong's economic growth this year from 3% to 2.5%, reflecting Hong Kong's first-quarter revenue. Tighter social distancing measures will delay the domestic market in the first quarter, customs clearance between Hong Kong and the mainland, or delay until the end of the year and other factors.

Morgan Stanley pointed out that the Hong Kong government's tightening of anti-epidemic measures is expected to affect Chinese New Year consumption. Although the impact will be partially offset by the increase in e-commerce consumption, the bank still lowered its first-quarter GDP growth forecast for Hong Kong by 0.8%, down to 1.2%. Moreover, Morgan Stanley predicts that Hong Kong may postpone the relaxation of personal travel plans until the fourth quarter of this year or next year.

At the same time, Morgan Stanley predicts that residential property prices in Hong Kong will fall by 2% this year, mainly due to the poor performance of the stock market and the impact of the Federal Reserve's hawkish attitude or increase in mortgage rates.