Hong Kong's economy will register a growth slowdown in 2023, more than previously forecast, according to economists.

GDP is predicted to grow 2.7% next year from this year, as per the average forecast in Bloomberg's latest poll of economists. This is less than a previous estimate from August that projected 3.5% growth.

This growth revision comes at a time when economists also lowered their expectations for 2022. As it stands now, GDP is forecast to fall 3% this year, considerably less than the prior survey, which forecast GDP to remain unchanged. 

This latest prediction is mainly in line with the government's revised estimate published last week, where officials forecast a 3.2% contraction compared to the year before.

In addition, in Q4 this year, Hong Kong's economy is predicted to contract by 2.4%, a sharp turnaround from the 2.9% growth forecast in the previous survey, Bloomberg reports.

The downwardly revised growth forecasts underscore the various headwinds Hong Kong has faced, such as weaker trade, rising global and domestic interest rates and the sluggish emergence from the Covid crisis. Last month, Hong Kong reported that GDP declined in Q3 by 4.5%, far below expectations.

Moreover, in another poll of six economists, half forecast China having a protracted exit from its zero-Covid stance would be the largest downside risk for Hong Kong's economy, whilst others said the tightening financial conditions and the global economic slowdown were the main risks. 

"While the city is reopening, we think the boost in activity will struggle to offset immense headwinds from weakening external demand, rising interest rates, falling housing prices, and a likely withdrawal of fiscal transfers to households next year," according to Lloyd Chan, economist at Oxford Economics Ltd. 

Chan, who views global tightening as the main risk to Hong Kong's outlook, reduced his growth forecast for this year to a 3% contraction from a 0.8% decline. The projection for 2023 was also downwardly revised to 1.4% growth from 3%.