Hong Kong GDP

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Hong Kong: GDP accelerates in Q2 as external sector partially recovers

August 14, 2015

In the second quarter, the economy expanded 2.8% over the same quarter of the previous year, which was above the 2.4% increase tallied in Q1 and marked the largest rise since Q3 2014. The print came in above the 2.1% rise that market experts had expected.

The acceleration in Q2 mainly reflected a partial recovery in the external sector on lower imports, while domestic demand moderated. Private consumption grew 6.0% in Q2, which was above the 5.3% tallied in Q1. In contrast, fixed investment slowed to 6.5% in Q2 (Q1: +7.5% year-on-year). In addition, the government consumption level inched down from Q1’s 3.4% to 3.3% in Q2.

On the external front, exports of goods and services fell 2.7% in Q2, which contrasted the 0.3% increase tallied in Q1. Imports contracted as well, recording a 2.5% fall in Q2 (Q1: +0.7% year-on-year). As a result, the external sector’s net contribution to overall economic growth increased from minus 0.9 percentage points in Q1 to minus 0.3 percentage points in Q2.

A quarter-on-quarter comparison contrasts the acceleration suggested by the annual data; the economy fell from a seasonally-adjusted 0.7% increase in Q1 to a milder 0.4% expansion in Q2.

The government expects the economy to grow between 2.0% and 3.0% in 2015. FocusEconomics Consensus Forecast panelists see GDP expanding 2.3% in 2015, which is down 0.1 percentage points from the previous month’s estimate. For 2016, the panel expects the economy to increase 2.7%.

Author:, Economist

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