Hong Kong: GDP slows in third quarter
November 15, 2013
GDP expanded 2.9% over the same quarter last year in Q3. The reading came in below the revised 3.2% increase observed in the second quarter (previously reported: +3.3% year-on-year) and undershot the 3.1% rise that Consensus Forecast panelists had expected.
Domestic demand continues to be the main driver of growth, mainly due to rising stockpiling. Private consumption growth weakened, decelerating from a 4.2% rise in Q2 to a 2.8% expansion in Q3. Government spending also moderated to a 2.7% growth (Q2: +3.2% yoy). Although gross fixed investment lost some steam (Q2: +6.9% yoy; Q3: +2.2% yoy), total investment improved due to a strong accumulation of inventories.
On the external front, exports of goods and services grew 5.9% in the third quarter, which was below the 6.7% increase tallied in the second quarter. Imports followed suit and expanded 6.4% in Q3; the expansion was slower than the 6.8% increase registered in Q2. As a result, the external sector's net contribution to overall economic growth deteriorated from minus 0.4 percentage points in Q2 to minus 0.8 percentage points in Q3.
A quarter-on-quarter comparison confirms the slight deceleration suggested by the annual data; the economy grew a seasonally-adjusted 0.5% in the third quarter, which was below the 0.7% increase seen in the second quarter.
The government expects the economy to expand between 2.5% and 3.5% in 2013. FocusEconomics Consensus Forecast panelists see the economy growing 3.0% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects the economy to grow 3.6%, which is also unchanged from last month's estimate.