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Hong Kong: GDP slows in Q3 as domestic demand softens significantly

November 13, 2015

In the third quarter, the economy expanded 2.3% over the same quarter of the previous year, which was below the 2.8% increase tallied in Q2 and marked the softest rise since Q2 2014. However, the print came in above the 2.0% rise that market experts had expected.

The slowdown in Q3 mainly reflected modest growth in domestic demand, which more than offset improvement in the external sector on lower imports. Private consumption grew 4.3% in Q3, which was below the 6.1% tallied in Q2. Fixed investment fell a sharp 6.5% in Q3 (Q2: +5.2% year-on-year). In addition, government consumption inched down from Q2’s 3.3% expansion to 2.6% growth in Q3.

On the external front, exports of goods and services fell 2.8% in Q3, which was slightly below the 2.7% drop tallied in Q2. Imports contracted as well, recording a 3.3% fall in Q3 (Q2: -2.5% year-on-year). As a result, the external sector’s net contribution to overall economic growth rebounded from minus 0.3 percentage points in Q2 to plus 1.0 percentage points in Q3.

A quarter-on-quarter comparison contrasts the deceleration suggested by the annual data; the economy rose from a seasonally-adjusted 0.4% increase in Q2 to a stronger 0.9% expansion in Q3.

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 unchanged from the previous month’s estimate. For 2016, the panel also expects the economy to increase 2.3%.


Author:, Economist

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Hong Kong GDP Q3 2015

Note: Year-on-year changes of GDP in %.
Source: Census and Statistics Department Hong Kong and FocusEconomics Consensus Forecast.


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