Hong Kong Economic Outlook
November 17, 2020The economy performed better than expected in Q3, as the annual contraction softened to a year-to-date low, while activity rebounded strongly on a quarter-on-quarter basis. The improvement was chiefly driven by healthier domestic demand. Despite contracting again, private consumption and investment activity showed signs of recovery in Q3 amid the gradual easing of social distancing measures in September and as fiscal stimulus measures fully kicked in. Similarly, exports fell at a softer pace in Q3, hinting at recovering foreign demand. Turning to Q4, the PMI jumped in October, pointing to a continued improvement in private sector conditions. In other news, a resolution to dismiss politicians deemed a threat to national security passed by Beijing on 11 November prompted the mass resignation of all remaining pro-democracy lawmakers in Hong Kong, further ratcheting up tensions over the future of the territory and boding ill for business environment in turn.
Hong Kong Economic GrowthGDP is expected to rebound next year, emerging from a two-year recession triggered by political unrest and Covid-19. A gradual recovery in domestic demand should spearhead the rebound, with firmer growth in mainland China further solidifying the momentum. That said, uncertainty over the political situation and the course of the pandemic clouds the outlook. FocusEconomics panel projects the economy to rebound and grow 4.6% in 2021, which is up 0.4 percentage points from the previous month’s forecast. In 2022, the panel sees growth moderating to 2.9%.
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|Bond Yield||1.82||3.38 %||Dec 31|
|Exchange Rate||7.79||-0.11 %||Jan 01|
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Hong Kong Economic News
November 20, 2020
Consumer prices rose a seasonally-adjusted 0.90% from the previous month in October, swinging from September's 0.80% fall.
November 13, 2020
According to a second estimate released on 13 November, GDP fell 3.5% in year-on-year seasonally-adjusted (yoy sa) terms in the third quarter.
November 4, 2020
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) rose to 49.8 in October, from 47.7 in September, marking the best result since March 2018.
November 2, 2020
Retail sales fell 13.4% compared to the same month a year earlier in September, matching August's revised result (previously reported: -13.3% year-on-year), which had marked the softest decline since July 2019. Looking at the details of the release, supermarkets sales fell for the first time since December 2019 at the end of Q3, dragging on the overall result.
October 30, 2020
According to a preliminary estimate, GDP dipped 3.4% in year-on-year seasonally-adjusted (yoy sa) terms in the third quarter, improving markedly from Q2’s 9.0% decline.