Hong Kong: GDP decelerates in Q1 as domestic demand slows down
May 15, 2015
In the first quarter, the economy expanded 2.1% over the same quarter of the previous year, which undershot the 2.4% increase tallied in Q4 2014. That said, the print came in just above the 2.0% rise that market experts had expected. GDP growth in 2014 was revised upward from 2.3% to 2.5% following the incorporation of the latest information and rebasing to 2014.
The deceleration in Q1 mainly reflected a deterioration in the domestic sector, while the external sector improved on lower import growth. Private consumption grew 3.5% in Q1, which was down from the 4.1% tallied in Q4. In contrast, fixed investment accelerated to a solid 7.3% in Q1 (Q4: +3.4% year-on-year). In addition, government consumption inched up from Q4’s 3.3% to 3.5% in Q1.
On the external front, exports of goods and services grew a mild 0.2% in Q1, which was below the 0.4% increase tallied in Q4. Imports also decelerated, and at a faster pace, slowing down from a 1.1% increase in Q4 to 0.5% in Q1. As a result, the external sector’s net contribution to overall economic growth increased from minus 1.6 percentage points in Q4 to minus 0.6 percentage points in Q1.
A quarter-on-quarter comparison contrasts the deceleration suggested by the annual data; the economy inched up from a seasonally-adjusted 0.2% increase in Q4 to a 0.4% expansion in Q1.
Author: Eric Denis , Economist