Although economy Sustained upturns, the outlook may be less bright

The first quarter figures suggested that the Hong Kong economy is on track for a decent growth with the domestic sector taking the lead and external demand staging an impressive rebound underpinned by overseas buyers' needs to replenish their inventories.

Going forward, however, it is uncertain whether the growth momentum can be sustained, as the global economy still faces strong headwinds. Recent abrupt changes to financial markets, households, institutions, and government policies are unlikely to be reversed in the next few years. Deleveraging and increasing regulation will continue, which could lead to slower growth in the advanced economies for years to come.

Emerging economies, including mainland China, are shifting to a domestic-led growth model, but this will take time. They will still be dependable on the advanced economies for growth in the medium term. As such, growth in these countries will also be affected by the slowdown in the advanced economies.

A sustained upturn in external demand activities is crucial in getting Hong Kong's outward-facing economy back on a solid growth track.