Hong Kong chart book - Gradual improvement in the making

The real GDP grew by 0.5% YoY in 1Q19, the slowest growth since 3Q09. Yet, it should improve alongside gradual stabilization of the mainland economy.
Samuel Tse06 May 2019
Photo credit: AFP Photo

• Hong Kong’s real GDP grew by 0.5% YoY in 1Q19, the slowest growth since 3Q09. On the positive side, GDP advanced by 1.2% QoQ, from -0.5% in 4Q18.
• Private consumption (60% of GDP) saw a modest growth of 0.1% despite a strong equity market rally in 1Q19. Investment expenditure fell further by 7.0%, compared with the decrease of 5.8% in 4Q18, as cautious sentiment prevailed.
• Goods exports recorded the first decline since 1Q16 due to the ongoing China-US trade tension. Services export growth decelerated to 1.4% from 3.3% due to cautious investment sentiment, despite inbound tourism recovered somewhat.
• The property market appears to have bottomed out as a Dovish Fed will unlikely hike rates this year. A robust labor market with unemployment rate hovering at a 20 year low of 2.8% further buttress the market. As a result, home price went up by 5.0% since end-18 and 7.9% from the trough in 2019.
• The HK economy should continue to improve alongside gradual stabilization of the mainland economy.

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Samuel Tse

Economist - China & Hong Kong

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