Hong Kong skyline from above

Hong Kong GDP Q1 2020

Hong Kong: GDP plunges at sharpest rate on record in Q1

The economy declined at the steepest pace since current records began in the first quarter, with GDP plunging 8.9% in annual terms (Q4: -3.0% year-on-year). On a seasonally-adjusted quarter-on-quarter basis, the economy contracted 5.3% in Q1, sharper than the previous quarter’s 0.5% decrease.

Household spending dropped 10.1% year-on-year in the first quarter (Q4 2019: -2.9% yoy), while fixed investment declined at a more moderate rate of 14.3% in Q1, compared to the 16.8% contraction in the prior quarter. In contrast, government consumption growth jumped to 8.4% in Q1 (Q4: +6.1% yoy).

On the external sector, exports of goods and services contracted 15.2% in Q1, marking the worst reading since Q1 2009 (Q4: -6.1% yoy). In addition, imports of goods and services slid at a more pronounced rate of 13.0% in Q4 (Q4: -6.8% yoy).

Looking ahead, the contraction in economic activity should be more or less similar in the second quarter. Lockdown measures are easing around region, but the pandemic should still keep Hong Kong’s tourism and retail sectors in the doldrums due to ongoing border restrictions and anemic consumer confidence, which will weigh on private consumption.

Moreover, the first quarter marked the third straight year-on-year decline in economic activity and fixed investment has contracted at a double-digit pace since Q1 2019. Investor confidence and business sentiment levels are showing little signs of improving, and consequently investment will remain depressed.

Nevertheless, stronger fiscal support worth roughly 10% of GDP should ensure a softer fall in economic activity in the second half of the year.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest