Downward pressure on HK economy still striking: financial chief

High external inflation and rising pressure to raise interest rates are troubling the global economy, increasing the downward pressure on the Hong Kong economy, financial chief Paul Chan Mo-po said in his blog.

Chan stated that the value of merchandise exports fell 1.4 percent year-on-year in May and will continue to be under pressure. Meanwhile, the value of retail sales fell slightly by 1.7 percent in May after an 11.7 percent jump in April when the first batch of vouchers was disbursed.

Many retailers and restaurants have indicated that business has slowed down recently, he wrote. The future situation of the economy will depend on the development of the pandemic, as well as the impact of the tightening financial environment on people's confidence and ability to spend.

When the economic outlook is relatively uncertain, Chan believed the second phase of consumer vouchers to be released in phases will help prolong the effect of boosting the economy.

Chan added that the second phase of the vouchers will inject more than HK$30 billion of purchasing power into the market. “With the multiplier effect, it was hoped to add optimism and real purchasing power to the consumer market.”