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
February 4, 2021
Retail sales plunged 14.0% compared to the same month a year earlier in December, which was markedly worse than November's 4.8% decrease.
February 3, 2021
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) increased to 47.8 in January, from 43.5 in December.
January 29, 2021
GDP contracted at a milder rate of 3.0% year-on-year in the fourth quarter, after falling 3.6% in the third quarter.
January 4, 2021
Retail sales slid 4.7% compared to the same month a year earlier in November, which was markedly softer than October's 9.3% decrease.
January 4, 2021
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) dived to 43.5 in December, from 50.1 in November, marking the worst result since April 2020.