Hong Kong Economic Outlook
October 18, 2016Hong Kong’s economic performance remains vulnerable to mounting headwinds due to weak external demand and the knock-on effects of China’s lackluster economy. Demand from China continued to moderate in September, while the yuan retreated to a six-year low against the U.S. dollar in the same month. This weighed on Chinese investors’ appetite for investment in Hong Kong as well as on their purchasing power in the island. The latter dragged heavily on Hong Kong’s retail sales, which saw a severe decline in purchases of luxury items in August. The real-estate sector was also beset by uncertainty, as the rising probability of a drying up of Chinese capital and the increased likelihood of a Federal Reserve interest rate hike risk boosting the cost of mortgage borrowing. Nonetheless, other high-frequency data paint a brighter picture: low unemployment levels held steady in August and the PMI posted the slowest contraction in a year and a half in September.
Hong Kong Economy Data
5 years of Hong Kong economic forecasts for more than 30 economic indicators.
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Hong Kong Facts
|Bond Yield||1.05||0.0 %||Oct 20|
|Exchange Rate||7.76||0.01 %||Oct 20|
|Stock Market||23,374||0.30 %||Oct 20|
Hong Kong Economic Growth
October 18, 2016A faltering Chinese economy and increased uncertainty on the timing of U.S. interest rate normalization will continue to keep economic growth below potential. Our Consensus Forecast projects economic growth of 1.3% in 2016, which is unchanged from last month’s estimate. The panel sees GDP expanding 1.7% in 2017 on the back of a gradual return of external demand to the island.
Hong Kong Economic News
October 5, 2016
The Nikkei Hong Kong Purchasing Managers’ Index (PMI) released by IHS Markit rose from August’s 49.0 to 49.3 in September.
September 30, 2016
Hopes last month that a recovery in retail sales might be underway were dampened in August on the back of declining numbers of mainland tourists.
September 22, 2016
Inflation came in at 4.3% in August, which was notably above July’s 2.3%.
September 5, 2016
The Nikkei Hong Kong Purchasing Managers’ Index (PMI) released by IHS Markit climbed from July’s 47.2 to 49.0 in August.
August 29, 2016
Although tourist visitors increased for the first time in July after 13 months of successive drops, the effect on retail sales appears to have been limited.