Hong Kong Economic Forecast

Hong Kong Economic Outlook

September 21, 2021

After GDP growth lost some traction in the second quarter amid a weaker external sector, year-on-year growth has likely lost further momentum in the third quarter, largely due to a slightly less favorable base effect. Annual retail sales slumped to a six-month low in July, potentially pointing towards a slowdown in private spending, while both merchandise imports and exports lost steam. More positively, in the same month the unemployment rate reached its joint-lowest level since April 2020, while the manufacturing PMI hit the highest reading in over seven years amid faster increases in output and new orders. Moreover, authorities announced travelers from China will no longer need to quarantine starting from 8 September, which should provide some respite for the ailing tourism sector.

Hong Kong Economic Growth

The economy is projected to recover lost ground this year as it leaves behind its two-year-long recession, with stronger activity at home and abroad spurring private spending and external demand. In 2022, although GDP growth is expected to moderate, it should remain robust. That said, uncertainty over the course of the pandemic remains a risk to the outlook. The FocusEconomics panel projects the economy to rebound and grow 6.4% in 2021. In 2022, the panel sees growth moderating to 3.1%, which is up 0.1 percentage points from the previous month’s forecast.

Hong Kong Economy Data

2015 2016 2017 2018 2019
Population (million)7.37.47.47.57.6
GDP per capita (USD)42,31943,49146,03748,32348,380
GDP (USD bn)309321341362366
Economic Growth (GDP, annual variation in %)2.42.23.82.8-1.2
Domestic Demand (annual variation in %)1.52.55.24.3-3.5
Consumption (annual variation in %)4.82.05.55.3-1.1
Investment (annual variation in %)-3.2-0.13.11.7-12.3
Retail Sales (annual variation in %)-1.5-7.11.97.6-12.3
Unemployment Rate3.33.43.22.82.9
Fiscal Balance (% of GDP)0.64.55.62.4-  
Public Debt (% of GDP)0.10.10.10.10.3
Money (annual variation in %)5.57.710.04.32.8
Inflation Rate (CPI, annual variation in %, eop)2.31.21.72.62.9
Inflation Rate (CPI, annual variation in %)3.02.41.52.42.9
Inflation (PPI, annual variation in %)-2.81.33.82.01.0
Benchmark Interest Rate (%)0.391.021.312.332.43
Stock Market (annual variation in %)-7.20.436.0-13.69.1
Exchange Rate (vs USD)7.757.757.817.837.79
Exchange Rate (vs USD, aop)7.757.767.797.847.84
Current Account (% of GDP)3.34.04.63.76.2
Current Account Balance (USD bn)10.312.715.914.822.7
Trade Balance (USD billion)-57.1-54.5-61.9-71.7-54.1
Exports (USD billion)465462498531510
Imports (USD billion)523517559603564
Exports (annual variation in %)-1.8-0.67.66.8-4.0
Imports (annual variation in %)-4.1-1.18.27.8-6.5
International Reserves (USD)359386431425441
External Debt (% of GDP)420423461469457

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Hong Kong Facts

Value Change Date
Bond Yield1.823.38 %Dec 31
Exchange Rate7.79-0.11 %Jan 01

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