Domestic Demand in Hong Kong
Hong Kong - Domestic Demand
GDP growth loses some steam in the second quarter
A preliminary estimate showed that economic activity expanded 7.6% year-on-year in the second quarter, down from the 8.0% jump tallied in the first quarter.
The slight slowdown was predominately driven by stronger imports (Q2: +20.2% year-on-year; Q1: 18.9% yoy), which weighed on the external sector, while exports grew 18.4% in the second quarter down from Q1’s 24.8% yoy.
On the domestic front, government consumption growth eased from 7.0% in Q1 to 2.8% in the second quarter. However, both private consumption and fixed investment growth gained momentum in the second quarter: Household spending rose 6.8% (Q1: +2.1%), while gross fixed capital formation jumped 23.8% after rising 4.8% in the prior quarter.
Commenting on the latest GDP print, Ho Woei Chen, an economist at UOB, noted:
“Starting in August, the issuance of the HK$5,000 (US$643) in electronic vouchers to permanent residents and eligible immigrants aged 18 and above as announced in 2021/22 Budget will be another positive driver for private consumption recovery. The boost to the full-year GDP growth was estimated to be around 0.7 ppt. While sustained recovery in external demand, improving domestic job market and pent-up domestic demand are positive for Hong Kong’s outlook, the rebound will still be limited by strict COVID-19 safety measures and international travel restrictions as its economy is largely services-oriented.”
Hong Kong - Domestic Demand Data
|Domestic Demand (annual variation in %)||1.5||2.5||5.2||4.3||-3.5|
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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