Hong Kong: Second release confirms GDP contracted at sharpest rate in a decade in Q3
December 5, 2019
The revised GDP reading confirmed the economy contracted at the sharpest pace since June 2009 in the third quarter, as Hong Kong faced the double whammy of mass protests battering domestic demand and the U.S.-China trade war hampering the external sector.
GDP tumbled 2.9% in year-on-year terms, which is unchanged from the preliminary reading, following Q2’s 0.4% expansion. Meanwhile, on a seasonally-adjusted quarter-on-quarter basis, the economy fell an unrevised 3.2% in Q3, which was steeper than Q2’s 0.5%.
The fall in year-on-year GDP in the third quarter was mainly driven by a revised 3.4% decline in private consumption (previously reported: -3.5% yoy; Q2: +1.3 yoy), while fixed investment contracted at an unrevised pace of 16.3% in Q3 (Q2: -10.8% yoy). In contrast, government consumption growth accelerated from 4.0% in Q2 to a revised 5.9% (previously reported: 5.3% yoy).
On the external front, both exports and imports of goods and services contracted at a sharper pace in Q3 relative to Q2. Muted demand from mainland China weighed on exports, while depressed business and consumer sentiment have suppressed import demand in recent months.
Author: Steven Burke, Economist