Hong Kong Q3 GDP up 4.1% on year, but lower than forecast
2023.10.31 09:01
© Reuters. FILE PHOTO: Tourists relax on the waterfront in front of Victoria Harbour, with the iconic skyline buildings as a backdrop, in Hong Kong, China June 28, 2023. REUTERS/Tyrone Siu/File Photo
By Twinnie Siu and Donny Kwok
HONG KONG (Reuters) -Hong Kong’s economic growth accelerated in the third quarter to 4.1% from a year earlier, official advance estimates showed on Tuesday, as inbound tourism and private consumption supported a revival.
The reading missed a median forecast of 5.2% in a Reuters poll of 13 economists, but beat the 1.5% expansion of the second quarter and the 2.9% of the first.
“Inbound tourism and private consumption will continue to underpin economic growth for the rest of the year,” a government spokesman said.
Meanwhile a “difficult external environment” amid geopolitical tensions and tight financial conditions will “continue to weigh on exports of goods and investment and consumption sentiment.”
Private consumption expenditure increased by 6.5% in the quarter as compared to 7.7% growth three months earlier, helped by a surge in visitor arrivals.
Goods exports fell further amid weak external demand, declining by 8.6% as compared to a drop of 15.1% in the second quarter.
“The big picture remains more or less the same as the external environment is still challenging and interest rates are elevated,” said Thomas Shik, chief economist at Bank. “These continue to weigh on trade and investment.”
On a quarterly basis, third quarter GDP grew a seasonally adjusted 0.1% in July-September, the data showed. That compared with 1.4% forecast in the Reuters poll.
Last week, Hong Kong’s leader John Lee announced stimulus measures focusing on reviving the property market, attracting businesses and talent.
In August, the government revised up its GDP forecast for 2023 to between 4.0% and 5.0%.
Hong Kong’s deficit for this fiscal year is expected to be almost doubled to exceed HK$100 billion ($12.8 billion), Financial Secretary Paul Chan warned, citing a slow post-pandemic recovery, increase in government spending and a drop in revenue from land sales and stamp duty.
“The pace of consumer spending will likely moderate next year as the boost from the end of COVID-related restrictions and base effects diminish,” according to a report released by Oxford Economics after the preliminary data.
($1 = 7.8215 Hong Kong dollars)
