Hong Kong’s economy increased at its fastest pace in fours years as it expanded by +8.2% in Q1 2010, with exports and retail spending rebounding.

The city’s growth has been driven by China’s economic revival as a record 5.5 million visitors arrived from the nation in the first quarter, combined with inflows of capital and an increase in demand for exports.

The first-quarter number compares well with the -7.8% contraction in the same period in 2009, which was the city’s biggest decline in a decade, however growth could slow in coming quarters, according to Hang Seng Bank Ltd.

The Government has forecast a full year’s growth of between +4-5% and inflation of 2.3%, and has indicated that the city’s expansion could potentially be bigger if there were no major global problems as the outlook for exports had become more uncertain.