Hong Kong: GDP slows in Q4 as domestic demand contracts
February 24, 2016
In the fourth quarter, the economy expanded 1.9% over the same quarter of the previous year, which was below the 2.3% increase tallied in Q3 and marked the softest rise since Q3 2012. The print was in line with market expectations.
The slowdown in Q4 mainly reflected a contraction in domestic demand, which more than offset improvement in the external sector. Private consumption grew 3.2% in Q4, which was below the 4.3% tallied in Q3. Fixed investment fell a sharp 9.7% in Q4 (Q3: -6.4% year-on-year). However, government consumption accelerated from Q3’s 2.8% expansion to 3.5% growth in Q4.
On the external front, exports of goods and services fell 0.9% in Q4, which was above the 2.7% drop tallied in Q3. Imports contracted at a softer rate as well, recording a 1.8% fall in Q4 (Q3: -3.2% year-on-year). As a result, the external sector’s net contribution to overall economic growth rose from 1.0 percentage point in Q3 to 2.0 percentage points in Q4, which marked the strongest reading since Q1 2011.
A quarter-on-quarter comparison confirms the deceleration suggested by the annual data; the economy rose a seasonally-adjusted 0.2% in Q4, which was below Q3’s 0.6% increase and marked the softest reading in a year and a half.
Author: Eric Denis , Economist