Hong Kong Economic Outlook
July 17, 2018The economy likely shifted into a lower gear in the second quarter. A further decline of the PMI in June closed out a string of dismal prints in Q2, underscoring how weaker Chinese demand has dragged on the private sector. Furthermore, indications of a slowdown in China could further dampen demand for Hong Kong exports and investment spending. Domestic demand appeared resilient in Q2, however, supported by expansionary fiscal stimulus and a robust labor market. Moreover, May’s solid retail sales report reaffirms a pick-up in consumer spending. Although housing prices remain elevated near all-time highs, creating a wealth effect for homeowners, government measures including a new property tax, paired with rising domestic interest rates, could finally cool the buoyant housing market.
Hong Kong Economic GrowthWhile the economy remains in good health, buoyed by strong domestic fundamentals, several headwinds persist. Hong Kong’s dependence on trade makes it vulnerable to escalating U.S.-China trade disputes and potential knock-on effects to the external sector. Moreover, monetary policy normalization in the U.S. will continue to tighten domestic financial conditions and provoke capital outflows. FocusEconomics panelists expect growth of 3.7% in 2018, up 0.2 percentage points from last month’s forecast, and 2.7% in 2019.
Hong Kong Economy Data
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Hong Kong Facts
|Bond Yield||2.19||3.38 %||Aug 15|
|Exchange Rate||7.85||-0.11 %||Aug 15|
|Stock Market||27,324||-1.92 %||Aug 15|
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Hong Kong Economic News
Hong Kong: Growth slows markedly in Q2 amid increased trade uncertainty and tighter financing conditions
August 10, 2018
The economy cooled noticeably from the seven-year high registered in the first quarter, growing 3.5% year-on-year in the second quarter (Q1: +4.6% year-on-year, previously reported; +4.7% yoy).
August 3, 2018
The Nikkei Hong Kong Purchasing Managers’ Index (PMI), which is released by IHS Markit, inched up to 48.2 in July from 47.7 in June, remaining below the 50-point threshold that separates expansion from contraction in the private sector.
August 1, 2018
Retail sales volumes grew a still robust 9.8% in annual terms in June, decelerating from May’s revised 11.5% expansion (previously reported: +11.6% year-on-year).
July 23, 2018
Inflation picked up to 2.4% in June, from 2.1% in May.
July 5, 2018
The Nikkei Hong Kong Purchasing Managers’ Index (PMI), which is released by IHS Markit, fell for the fourth consecutive month in June, inching down to 47.7 from 47.8 in May and moving further below the 50-point threshold that separates expansion from contraction in the private sector.