- Majority in survey forecast Hong Kong’s economy to grow or remain unchanged in 2023
- Over half of accounting and finance professionals bracing for property price falls
- Forty-three per cent predict company revenue growth
Thirteen per cent expect the economy will remain stable in 2023. CPA Australia’s latest survey on Hong Kong’s economic and business outlook forecasts a potential economic bounce back from 2022’s contraction.
“After managing through a difficult year and facing an uncertain global economic environment next year, our respondents are cautiously optimistic,” CPA Australia 2022 Divisional President of Greater China Eden Wong FCPA said.
“Forty-seven per cent of respondents believe that Hong Kong’s economy will grow. The easing of COVID restrictions domestically and Hong Kong’s reconnection with the world have contributed to this confidence boost.”
Respondents were less positive about the property market, with more than half expecting price falls in 2023. Meanwhile, 59 per cent expect tourism-reliant retail property values to decline.
“The government could consider reviewing the extra stamp duties on property transactions and setting out plans to boost tourism.”
Business sentiment is improving, with 43 per cent of respondents predicting their company’s revenue will grow in 2023. However, some expect a challenging year ahead. More than one in five forecast their company’s revenue will decline next year.
Many businesses are planning a prudent approach with a focus on efficiency and cost management. Four-in-ten expect their company will freeze headcount while 31 per cent expect an increase. Forty-seven per cent expect their salaries will grow in 2023. Talent shortages (42 per cent) will be the biggest test for businesses in 2023, followed by policy and regulatory changes (32 per cent) and weak demand (30 per cent).
“Hong Kong businesses have shown high levels of resilience in the face of adversities, but many of these challenges will persist next year.”
“It’s essential to quickly resume restriction-free cross-border travel and return to normal economic activity as soon as possible. Many neighbouring economies are aggressively luring investors and talent. Hong Kong should be taking advantage of its competitive advantages, including its super-connector status, to avoid lagging our competitors. Measures unveiled in the Chief Executive’s Policy Address to attract businesses and talent to Hong Kong are a good step.
“We shouldn’t underestimate the impacts of policy and regulatory changes at home and abroad on Hong Kong. For example, COVID-related travel restrictions, changes in accounting standards and developments in the international tax space. We suggest the government and regulators to engage frequently with stakeholders on policy consultation ensure changes are effective.”
More than half of respondents believe strengthening Hong Kong’s position as an international financial centre will improve its international competitiveness. While low and simple tax system is the biggest advantage to strengthen this role in the next three years.
“To consolidate the city’s position as an international finance centre, Hong Kong should continue strengthening its international ties. We expect Hong Kong to join the Regional Comprehensive Economic Partnership and sign more free trade agreements with other jurisdictions.
“We also look forward to seeing investment and talent-attraction initiatives from the Office for Attracting Strategic Enterprises. We urge the government to introduce more measures to unleash the potential of emerging sectors such as green and sustainable finance and further support innovation and technology.”
The survey respondents included 210 Hong Kong-based accounting and finance professionals.
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About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 170,000 members in over 100 countries and regions, including more than 22,200 members in Greater China. CPA Australia has been operating in Hong Kong since 1955 and opened our Hong Kong office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au