Hong Kong Economic Outlook
May 21, 2019Economic growth slumped to a near-decade low in Q1 2019, as private consumption stalled despite a healthy rebound in the stock and property markets, while the persistent drag from the U.S.-China trade war was likely partly responsible for contractions in fixed investment and goods exports. Turning to Q2, though little data is available yet the picture looks set to remain downbeat, despite a likely uptick in growth. The PMI notably remained mired in contraction in April, and the escalation of the trade war on 10 May—when the U.S. administration increased tariff rates on Chinese imports—is poised to further weigh on business confidence and investment unless a deal is reached swiftly. Moreover, weak April data in China suggests additional headwinds ahead. Although the next G20 summit on 28-29 June could provide an opportunity to defuse trade tensions, a trade deal now appears increasingly unlikely.
Hong Kong Economic GrowthExternal headwinds should dampen growth this year, amid heightened trade tensions and a structural mainland slowdown. On the flipside, the property market now appears less susceptible to a further correction, while a solid labor market should support private consumption. Nevertheless, the evolution of U.S.-China trade talks will remain critical to the outlook. Our panel expects growth of 2.3% in 2019, which is up 0.1 percentage points from last month’s forecast, and 2.4% in 2020.
Hong Kong Economy Data
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Hong Kong Facts
|Bond Yield||1.62||3.38 %||Jun 14|
|Exchange Rate||7.83||-0.11 %||Jun 14|
|Stock Market||27,118||-1.92 %||Jun 14|
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Hong Kong Economic News
June 5, 2019
The Nikkei Hong Kong Purchasing Managers’ Index (PMI), released by IHS Markit, fell from 48.4 in April to 46.9 in May, the lowest reading since June 2016.
May 31, 2019
Retail sales by volume fell 5.0% year-on-year in April, worsening from the 0.8% contraction logged in March.
May 24, 2019
Inflation rose to 2.9% in April, from 2.1% in March.
May 6, 2019
The Nikkei Hong Kong Purchasing Managers’ Index (PMI), released by IHS Markit, rose to 48.4 in April from 48.0 in March.
May 3, 2019
Retail sales by volume fell 0.8% year-on-year in March, up from the 1.9% decline registered in the Lunar New Year period of January-February.