Private Consumption in Hong Kong
The Hong Kong economy recorded average private consumption growth of 1.9% in the decade to 2022. In 2022, private consumption growth was -1.2%. For more private consumption information, visit our dedicated page.
Hong Kong Private consumption Chart
Hong Kong Private consumption Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Private Consumption (ann. var. %) | -0.8 | -10.6 | 5.6 | -2.2 | 7.7 |
Economic growth gains steam in the second quarter
GDP reading: GDP growth improved to 3.3% year on year in the second quarter from 2.8% in the first quarter, beating market expectations. Stronger goods exports and fixed investment were the key drivers, outweighing slumping private spending and softer services exports momentum. On a seasonally-adjusted quarter-on-quarter basis, economic growth slowed markedly to 0.4% in Q2, down from the previous period's 2.5% expansion.
Drivers: Private consumption fell 1.6% year-on-year in Q2, compared to a 1.2% expansion in Q1. The strength of the Hong Kong dollar and Hong Kongers shopping on the mainland dampened spending. Public consumption, meanwhile, bounced back, growing 2.0% in Q2 (Q1: -2.2% yoy). Fixed investment growth improved to 6.0% in Q2, above the 0.1% expansion in the prior quarter. On the external front, exports of services growth fell to 1.3% in Q2, marking the worst result since Q3 2022 (Q1: +9.4% yoy). In addition, imports of services growth slowed to 12.4% in Q2 (Q1: +18.0% yoy). Softer expansions in visitor flows amid the post-pandemic normalization of tourist activity likely weighed on both services exports and imports. In contrast, exports and imports of goods sped up in Q2 from Q1, likely boosted by strong global electronics demand.
GDP outlook: Our Consensus is for annual GDP growth to continue at a similar pace to Q2 for the remainder of the year, sustained by external demand.
Panelist insight: On the external sector, DBS analysts said: “The exports sector was a rare bright spot. Buoyed by rising demand for electronics, goods exports were up 7.6% YoY in 2Q24 in real terms. In value terms, exports to China and ASEAN were up 8.7% and 7.2% respectively. Meanwhile, imports in real terms increased at a more modest pace of 3.4% due to weak domestic demand. As a result, net exports contributed 3.7% ppts to Hong Kong's headline economic growth rate.” On tourism, United Overseas Bank’s Ho Woei Chen said: “Retail sales have reverted to contraction since Mar due to a number of factors such as the shift to cross-border consumption while tourist arrivals and spending are trickling in with the weak mainland economy and Hong Kong dollar strength likely to have affected demand. Total tourist arrivals reached 21.15 mn in 1H24, a significant improvement from 12.88 mn in 1H23 but was only 60% of the level in 1H19.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Hong Kong private consumption projections for the next ten years from a panel of 13 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Hong Kong private consumption.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Hong Kong private consumption projections.
Want to get access to the full dataset of Hong Kong private consumption forecasts? Send an email to info@focus-economics.com.
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