Consumption in Hong Kong
Hong Kong - Consumption
GDP plunges at sharpest rate on record in Q2
The economy contracted 9.0% in year-on-year seasonally-adjusted (yoysa) terms in the second quarter, resulting in the second fastest contraction since current records began—only marginally slower than Q1’s 9.1% decline—according to advance estimates. In quarter-on quarter seasonally-adjusted terms, GDP contracted 0.1% in Q2, after slumping 5.5% in Q1. These latest prints highlight the strain the economy is under as Hong Kong continues to grapple with the coronavirus pandemic and simmering social tension.
Private consumption fell 14.5% year-on-year in the second quarter (Q1: -10.6% yoysa), coinciding with an increase in the unemployment rate to 6.2%, which was the highest level in just over one-and-a-half decades. Moreover, fixed investment contracted 20.6% year-on-year in Q2 (Q1: -15.8% yoysa) as business confidence hit the lowest level since the Global Financial Crisis. More positively, government consumption growth accelerated to 9.6% in Q2 (Q1: +8.8% yoysa).
On the external front, exports of services plunged 46.6% year-on-year in Q2 (Q1: -37.4% yoysa) and exports of goods declined 2.1% (Q1: -9.7% yoysa). Meanwhile, the decline in imports of services intensified to 43.5% in Q2 (Q1: -24.5% yoysa), while the decline in imports of goods slowed to 6.8% (Q1: -11.1% yoysa).
Looking ahead, uncertainty regarding the evolution of Covid-19 will remain a threat to Hong Kong’s economic outlook, especially regarding tourism and retail sectors, as will the evolution of China-U.S. relations and social tensions. Hong Kong’s exports will remain constrained due to the difficult external environment. Nevertheless, the economy is expected to slowly recover during the remainder of the year 2020, assuming the recent surge of cases is contained again, partly due to strong fiscal support worth roughly 10% of GDP, along with additional measures aimed at providing financial relief.
Our panel projects the economy will contract 5.6% in 2020, which is down 0.4 percentage points from last month’s forecast. Moving to 2021, the panel sees the economy growing 4.2%.
Hong Kong - Consumption Data
|Consumption (annual variation in %)||4.8||2.0||5.5||5.3||-1.1|
5 years of economic forecasts for more than 30 economic indicators.
Hong Kong Facts
|Bond Yield||1.82||3.38 %||Dec 31|
|Exchange Rate||7.79||-0.11 %||Jan 01|
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August 5, 2020
The IHS Markit Hong Kong SAR Purchasing Managers’ Index (PMI) fell to 44.5 in July, after rising to 49.6 in June from 43.9 in May.
July 30, 2020
Retail sales fell 25.4% compared to the same month a year earlier in June, which was markedly softer than May's 34.0% decrease.
July 29, 2020
The economy contracted 9.0% in year-on-year seasonally-adjusted (yoysa) terms in the second quarter, resulting in the second fastest contraction since current records began—only marginally slower than Q1’s 9.1% decline—according to advance estimates.
July 21, 2020
Consumer prices were unchanged in June over the last month, matching the flat result seen in May.
July 1, 2020
On 30 June, the new security law for Hong Kong came into force, which will increase Beijing’s hold over the territory.