Hong Kong growth worsens in second quarter

Business | 16 Aug 2019 5:57 pm

Hong Kong's economy worsened in the second quarter, eking out a mere 0.5 percent growth, slowing from 0.6 percent in the first quarter.

First half growth came in at 0.5 percent, year-on-year, worse than expected.

The data was announced a day after the Financial Secretary Paul Chan Mo-po rolled out a UK$19.1 billion package of measures to soften the blows that the economy has been taking as a result of mainly external factors.

The economic conditions in the first half of the year were the weakest since the recession in 2009, the Government Economist, Andrew Au Sik-hung said today.

External demand contracted in the second quarter amid softening global economic growth, intensifying US-Mainland trade and technology tensions and the resultant slowdown in manufacturing and trading activities in Asia.

Domestic demand was sluggish as subdued economic conditions and various headwinds weighed on local economic sentiment.

Exports of goods weakened further, falling by 5.6 percent in real terms in the second quarter, after a 3.7 percent drop in the previous quarter.

Exports to the US tumbled at a double-digit rate, while shipments to the European Union weakened markedly to record a modest decline. 

Services exports also fell by 0.2 percent year-on-year in real terms after expanding by just 0.8 percent in the first quarter.

On a seasonally adjusted quarter-to-quarter comparison, real GDP declined by 0.4 percent in the second quarter after an expansion of 1.3 percent in the previous quarter.

Domestic demand remained sluggish.

Private consumption expenditure only grew modestly by 1.1 percent year-on-year in real terms in the second quarter as consumer sentiment stayed cautious in the face of various headwinds and the weakened economic outlook, Au said.

Overall investment expenditure fell markedly by 11.6 percent, reflecting continued contraction in building and construction activities and worsening business sentiment.

The growth forecast for the year has been revised down to between 0 and 1 percent.

 

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