Hong Kong's economic growth to slow to 2.5 percent in Q4, HKU study shows

Hong Kong’s economy is projected to grow at a slower pace of 2.5 percent, with the jobless rate further deteriorating to 3.8 percent this quarter, according to a forecast by the University of Hong Kong. 

That compared to a growth of 3.1 percent in the second quarter and a forecasted expansion of 2.7 percent in the quarter ended September, the APEC Studies Programme of the Hong Kong Institute of Economics and Business Strategy at the HKU said. 

Frequent severe weather disrupted logistics and adversely affected retail and tourism-related activities last quarter, leading to a slower increase in the gross domestic product, the report said. 

It expects the unemployment rate in the fourth quarter to rise by 0.1 percentage point from the current 3.7 percent, reflecting more cautious business sentiment amid weakening external demand. 

While entering a rate-cut cycle is expected to benefit Hong Kong’s economy, persistent US–China trade tensions and uncertainty over the US inflation trajectory leave the pace and scale of Fed rate cuts in doubt, tempering investment and trade growth, the university said. 

Still, the institution estimates that the city’s private consumption expenditure to improve from a 1.7 percent year-on-year rise to 3.3 percent, and the gross fixed capital formation, or investment, will also gain 1.1 percent, compared to a contraction of 3.9 percent in the third quarter.