Hong Kong’s economy is forecast to grow faster than previously predicted in 2023 due to a rebound in consumer spending.

This is in contrast to a likely growth slowdown in the rival financial hub, Singapore, as global demand softens.

Growth will register 4.6% this year, a rise from a prior forecast of 3.4%, according to the latest Bloomberg poll of economists, carried out between the 1st and 7th of June.

Whereas Singapore’s GDP is set to grow 1.4%, half a percentage point down, according to the Bloomberg survey.

“Hong Kong’s economy continues to see a consumption-driven rebound supported by tourism, boosting its short-term cyclical prospects,” according to Gary Ng, a senior economist at Natixis SA. That said, risks still remain to the outlook due to a global economic slowdown and increasing interest rates, he went on to say.

In addition, economists increased their growth predictions for the second quarter by 1.7 percentage points to 3.3% on this latest survey. The economy is then subsequently forecast to grow 6.7% in Q3 and 7.1% in the last three months of the year, the Bloomberg report adds.

Furthermore, in Singapore, it’s likely the economy could enter a technical recession in the first half of this year, predominantly fuelled by weakness in manufacturing, says United Overseas Bank senior economist Alvin Liew.

A recession is typically defined as two straight quarters of quarter-on-quarter contraction in GDP.

Moreover, headline consumer inflation forecasts for Singapore were increased going into next year. Economists now forecast 5% for the full year, a rise from a previous 4.7% prediction, and 3.1% for next year, compared to a prior 2.8%. Whereas in Hong Kong, inflation forecasts remained the same in this survey, holding at 2.4% for this year and 2.3% for 2024.