HK’s GDP growth out­look boosted

China Daily (Hong Kong) - - FRONT PAGE - By OSWALD CHAN in Hong Kong oswald@chi­nadai­

Hong Kong eco­nomic growth ex­ceeded the 10-year av­er­age in the sec­ond quar­ter, the third con­sec­u­tive quar­ter of above-av­er­age ex­pan­sion, and the gov­ern­ment re­vised its full-year eco­nomic growth fore­cast for this year up­wards by 1 per­cent­age point. This is against a back­drop of an im­prov­ing global econ­omy.

In the April to June quar­ter Hong Kong’s GDP grew 3.8 per­cent from the same quar­ter last year af­ter the city’s econ­omy ex­panded 4.3 per­cent in the first quar­ter, the fastest pace in nearly six years. In the first half of this year, the econ­omy grew 4 per­cent year on year.

Goods ex­ports reg­is­tered re­mark­able growth in the sec­ond quar­ter, up 5.6 per­cent year on year, as an im­prov­ing global econ­omy sup­ported Asian ex­ports. Ser­vices ex­ports rose 2.3 per­cent in the same pe­riod.

Pri­vate con­sump­tion grew a brisk 5.3 per­cent. Over­all in­vest­ment spend­ing strength­ened 8 per­cent year on year.

As im­port prices and cost pres­sures re­mained sub­dued, un­der­ly­ing in­fla­tion stood at 1.7 per­cent in the first half of this year. The gov­ern­ment pre­dicted un­der­ly­ing in­fla­tion of 1.8 per­cent for the full year com­pared with the orig­i­nal es­ti­mate of 2 per­cent.

“With an im­prov­ing global econ­omy, vi­brant do­mes­tic de­mand un­der­pinned by a full-em­ploy­ment la­bor mar­ket and ris­ing in­comes, as well as re­silient in­vest­ment de­mand fu­elled by con­struc­tion and in­fra­struc­ture ac­tiv­i­ties, we de­cided to raise the GDP growth rate fore­cast from 3 to 4 per­cent for the full-year of 2017,” deputy gov­ern­ment econ­o­mist An­drew Au Sik-hung told re­porters on Fri­day.

Fi­nan­cial Sec­re­tary Paul Chan Mo-po had ex­pected the city’s econ­omy to grow at a rate of 2 to 3 per­cent when he an­nounced the gov­ern­ment bud­get in Fe­bru­ary.

“The un­der­ly­ing pic­ture is that the over­all fun­da­men­tals in 2017 are bet­ter than in 2016,” said Thomas Shik, act­ing chief econ­o­mist at Hang Seng Bank.

“We ex­pect trade growth to con­tinue to ben­e­fit from the im­prove­ment in the ex­ter­nal en­vi­ron­ment, and strong la­bor mar­ket and fa­vor­able fi­nan­cial mar­ket con­di­tions should con­tinue to sup­port house­hold spend­ing.”

Hang Seng Bank up­graded the city’s GDP growth pre­dic­tion to 2.8 per­cent for this year af­ter firstquar­ter growth fig­ures were re­leased in May.

How­ever, some econ­o­mists are more cau­tious, say­ing many more eco­nomic, fi­nan­cial and geopo­lit­i­cal risk fac­tors are still not fac­tored into the mar­ket.

“Due to the wan­ing base ef­fect and an ex­pected de­cel­er­a­tion of the Chi­nese main­land’s growth, we ex­pect the city’s eco­nomic growth to have peaked in the first quar­ter and to slow down grad­u­ally in the com­ing quar­ters,” OCBC Bank said in its eco­nomic re­search re­port.

3.8 per­cent Hong Kong’s GDP growth rate in the sec­ond quar­ter

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.