Hong Kong, Feb 22 (IANS): The Hong Kong government on Wednesday unveiled a budget for the new financial year, with a focus on measures to support the speedy recovery of the economy.

The economy will see a visible rebound this year with growth of 3.5 per cent to 5.5 per cent for the year as a whole, Financial Secretary Paul Chan said while delivering the 2023-24 budget at the Legislative Council.

As overall economic sentiment improves in tandem with the revival of economic activities domestically as well as the rapid return of Hong Kong's exchanges with the mainland and the world to normalcy, private consumption will increase, Xinhua news agency quoted Chan as saying.

Hong Kong's economy contracted by 3.5 per cent year on year in 2022 amid both external and domestic headwinds, while the underlying inflation rate remained moderate at 1.7 per cent last year, he noted.

He forecast that the underlying inflation rate and the headline inflation rate will rise to 2.5 per cent and 2.9 per cent respectively this year, taking into account domestic cost pressures alongside the economic recovery.

The economy will grow by an average of 3.7 per cent annually in real terms from 2024 to 2027, higher than the trend growth of 2.8 per cent during the decade before the pandemic.

The underlying inflation rate is forecast to average 2.5 per cent annually, he said.

"In the medium to long term, the Hong Kong economy will see abundant opportunities," Chan said.