Hong Kong Economic Forecast

Hong Kong Economic Outlook

January 25, 2022

Annual GDP growth likely eased slightly in the fourth quarter, after slowing in Q3 due to weaker fixed investment and export growth. That said, household spending should have benefited from the government’s disbursement of cash vouchers for citizens in October and the unemployment rate falling to the lowest level since February 2020 in December. Consequently, retail sales growth averaged higher in October–November relative to Q3. Meanwhile, the private sector PMI pointed to healthy expansions in private sector output in Q4, albeit losing some momentum from Q3. Turning to Q1 this year, growth is expected to decline notably due to a less favorable base effect, while lingering Covid-19 containment measures and strict international border restrictions should continue to limit the pace of the economic recovery.

Hong Kong Economic Growth

GDP growth is expected to moderate this year but should remain upbeat nonetheless, with domestic demand supported by a tighter labor market and stronger business confidence. That said, uncertainty over the course of the pandemic, ongoing supply bottlenecks, a slowdown in mainland China and tense relations between Hong Kong citizens and China remain risks to the outlook. The FocusEconomics panel projects the economy to grow 2.9% in 2022, which is down 0.1 percentage points from the previous month’s forecast. In 2023, the panel sees growth moderating to 3.0%.

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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