Hong Kong Economic Outlook
July 16, 2019The economy seems to have remained downbeat in the second quarter, despite strengthening from Q1’s near one-decade low growth reading. The private sector PMI edged up from May’s near three-year low in June but remained in contraction, while retail sales contracted for the fourth month running in May. Meanwhile, though U.S.-China trade negotiations restarted on 29 June, the dispute could still escalate and looks set to drag on the economy at least until year-end. On the political front, recent large-scale protests against a proposed bill allowing extradition to China morphed into a broader pro-democracy uprising despite the bill being declared “dead” by Chief Executive Carrie Lam. Beijing has reportedly refused Lam’s resignation, making her a likely lame duck for the remainder of her tenure. The uncertainty and unrest are poised to hurt business and consumer sentiment.
Hong Kong Economic GrowthGrowth will likely decelerate this year due to the mainland’s slowdown and the shadow cast by the trade war with the U.S. Despite a recent truce, tensions could still escalate by year-end, while recent civil unrest could deter private investment. On the flipside, a tight labor market and likely interest rate cuts from the Fed should support domestic demand. Our panel expects growth of 2.0% in 2019, which is down 0.2 percentage points from last month’s forecast, and 2.3% in 2020.
Hong Kong Economy Data
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Hong Kong Facts
|Bond Yield||1.63||3.38 %||Jul 11|
|Exchange Rate||7.82||-0.11 %||Jul 11|
|Stock Market||28,432||-1.92 %||Jul 11|
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Hong Kong Economic News
July 4, 2019
The Nikkei Hong Kong Purchasing Managers’ Index (PMI), released by IHS Markit, rose from 46.9 in May, the lowest reading since June 2016, to 47.9 in June.
July 2, 2019
Retail sales by volume fell 1.7% year-on-year in May, which was however an improvement from the 5.0% contraction logged in April.
June 21, 2019
Inflation declined slightly to 2.8% in May, from 2.9% in April.
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.