Acknowledgments  1

Executive Summary  3

Context  5

A. Recent Developments and Outlook  6

A.1 Real Sector  6

A.2 External Sector  8

A.3 Monetary Conditions and Financial Sector  9

A.4 Fiscal Sector  13

B. Risks, Vulnerabilities, and Challenges  14

B.1 Near-term Risks and Vulnerabilities  15

B.2 Medium- to Long-term Challenges  17

C. Policy Discussions and Recommendations  18

C.1 Calibrating Macroeconomic Policies to Maintain Growth Momentum  18

C.2 Broadening New Growth Drivers  20

Box A. Toward an Effective Industrial Policy for Hong Kong's Industrial Upgrading  21

C.3 Adapting Fiscal Policy to Support Economic Transition  24

C.4 Supporting Property Sector Recovery and Containing Associated Risks  26

C.6 Strengthening Hong Kong's Role as a Premier Super Connector  28