Hong Kong: Economic growth remains strong in the fourth quarter
February 23, 2011
In the fourth quarter, GDP expanded 6.2% over the same quarter last year, which was below the 6.7% growth recorded in the third quarter but above market expectations of a 5.5% expansion. In the full year 2010, GDP expanded 6.8% over the previous year, contrasting the 2.7% contraction in 2009. The reading reflected a strong improvement in domestic demand, which was offset to some extent by a weaker external sector. Domestic demand improved on the back of strong gross fixed investment (Q4: +8.8% year-on-year) and robust private consumption (Q4: +7.1% yoy). In contrast, the external sector lost steam as both exports and imports decelerated markedly. Exports of goods and services expanded 8.6% (Q3: +19.7% yoy) while imports rose 7.5% (Q3: +16.0% yoy). As a result, the net contribution to growth of the external sector fell from 8.4 percentage points in the third quarter to 2.9 percentage points in the fourth. A quarter-on-quarter comparison does not corroborate the slight deceleration suggested by the annual figures, as the economy expanded 1.5% over the second quarter in seasonally adjusted terms, up from the 0.9% expansion in the third quarter. The government recently published its forecast for 2011, and now expects full-year growth to range from 4.0% to 5.0%.