Hong Kong: GDP improves in Q4 on robust domestic demand
February 26, 2014
GDP expanded 3.0% over the same quarter of the previous year in Q4. The reading came in above the revised 2.8% increase observed in Q3 (previously reported: +2.9% year-on-year) and matched market expectations. In the full year 2013, GDP expanded 2.9%, which nearly doubled the 1.5% increase tallied in 2012.
Domestic demand continues to be the main driver of growth primarily due to increasing private consumption, which accelerated from a 2.4% rise in Q3 to a 3.2% expansion in Q4. Government spending also increased, reaching 3.2% growth (Q3: +2.3% yoy). Gross fixed investment gained steam and increased 5.3% (Q3: +2.8% yoy).
On the external front, exports of goods and services grew 5.6% in Q4, which was below the 6.0% increase tallied in Q3. Imports followed suit and rose 6.2% in Q4; the expansion was slightly slower than the 6.4% increase registered in Q3. As a result, the external sector's net contribution to overall economic growth deteriorated from minus 0.6 percentage points in Q3 to minus 1.2 percentage points in Q4.
A quarter-on-quarter comparison confirms the slight acceleration suggested by the annual data; the economy grew a seasonally-adjusted 1.1% in Q4, which was above the 0.7% increase seen in Q3.
The government expects GDP to increase between 3.0% and 4.0% this year. FocusEconomics Consensus Forecast panelists see the economy growing 3.4% in 2014, which is unchanged from last month's forecast. For 2015, the panel expects the economy to grow 3.5%.