Last week, the United States Federal Reserve announced it would continue to hold interest rates steady at about 5.25 per cent to 5.5 per cent, after a series of hikes beginning in March 2022.

Stable rates have boosted confidence in Hong Kong, which pegs its currency to the US dollar, with the number of property transactions – including both residential and non-residential units – surging 17 per cent in January over December’s tally.

Hong Kong’s economy rebounded to a less-than-expected growth of 3.2 per cent last year from a contraction in 2022, as weak global demand cast a shadow on the city’s post-pandemic recovery.

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The city’s exports plunged 7.8 per cent last year compared with 2022, even after a rebound in growth in the fourth quarter following a prolonged contraction.

Other key pillars of the economy, including the property and tourism sectors, have also faced difficulties.

High interest rates have contributed to Hong Kong’s housing prices falling to their lowest point in seven years, while the city welcomed 33.9 million visitors last year, but the figure accounted for only about 55 per cent of the average across 2017 and 2018.

Chan said that a string of major events and other activities recently announced by the government would help bring “economic and other potential benefits” to the city.

He also said authorities would continue to focus on innovation and technology as they sought to diversify the economy, highlighting efforts to develop the city into a leader of green technology.

The government in January announced the city would organise more than 80 events in the first half of the year.

Hong Kong Green Week, which is among the events, will begin later this month and involve a series of panel discussions, seminars and other initiatives focused on sustainability and green finance.

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Released last week, the 110-page consultation paper outlines five proposed new types of offences: treason; insurrection, incitement to mutiny and disaffection, and acts with seditious intention; sabotage; foreign interference; espionage and theft of state secrets.

“National security needs to be maintained to protect people’s safety, rights and fundamental interests,” Chan said. “It is also an important prerequisite for social prosperity and stability and for people to live and work in peace and contentment.”

The minister said that in the new lunar year the government would “consolidate governance to maintain prosperity” and “facilitate governance with prosperity”.

“We will do our best to actively carry out interpretation work, safeguard national security and maintain a favourable and good business and investment environment,” he said.

Economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at Chinese University, said interest rates might have peaked, but he expected rates to remain high.

Lee added that other factors affected the city’s economy, such as the city’s benchmark Hang Seng Index, which remained low. The index lost 9.2 per cent in January, the worst start to the year since 2016 when the gauge tumbled 10 per cent.

“Unless there are obvious ways to attract an inflow of money, which is difficult as it is related to politics, markets – both property and stocks – will remain stagnant,” he said.

Additional reporting by Laura Westbrook