Hong Kong: GDP accelerates in second quarter
August 16, 2013
In the second quarter, GDP expanded 3.3% over the same quarter last year. The reading overshot the revised 2.9% increase observed in the first quarter (previously reported: +2.8% year-on-year) and was virtually in line with market expectations of a 3.2% rise.
Domestic demand continues to be the main growth engine, with strong investment compensating for the moderation in private consumption. Gross fixed investment bounced back in the second quarter, expanding a robust 6.9% over the same period last year (Q1: -3.3% yoy). Private consumption growth weakened somewhat, decelerating from a 6.3% increase in Q1 to a 4.2% expansion in Q2. Conversely, government spending accelerated from a 2.1% increase in Q1 to a 3.1% expansion in Q2.
On the external front, exports of goods and services grew 6.6% in the second quarter, below the 8.0% increase tallied in the first quarter. Imports followed suit and expanded 6.7% in Q2, slower than the 8.6% expansion registered in Q1. The external sector's net contribution to overall economic growth improved from minus 1.2 percentage points in the first quarter to minus 0.4 percentage points in the second.
A quarter-on-quarter comparison confirms the improvement suggested by the annual data; the economy grew a seasonally adjusted 0.8% in the second quarter, well above the 0.2% increase seen in the first quarter.
The government revised its growth projections and now expects the economy to expand between 2.5% and 3.5% in 2013 (previous estimate: 1.5% - 3.5%). FocusEconomics Consensus Forecast panellists see the economy growing 2.9% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects the economy to grow 4.0%.
Author: Ricardo Aceves, Senior Economist