Hong Kong Q4 GDP Annual Growth Weakest in Near 3 Years

The Hong Kong economy advanced 1.3 percent year-on-year in the December quarter of 2018, easing from a downwardly revised 2.8 percent growth in the previous period. It was the weakest pace of expansion since the March quarter 2016, amid a marked slowdown in private consumption and a slump in fixed investment.
Census and Statistics Department l Rida Husna | rida@tradingeconomics.com 2/27/2019 6:42:19 AM
Private consumption increased by 3.1 percent in the fourth quarter, following a 4.8 percent rise in the previous three month-period and marking the slowest rise in ten quarters. In addition, fixed investment shrank 5.4 percent, compared to a 9.2 percent growth in the prior quarter and reaching the first drop in five quarters. Investment in building and construction contracted (-6 percent vs 1.1 percent Q3) and costs of ownership transfer slumped 43.7 percent (vs -1.1 percent in Q3), while spending on machinery, equipment and intellectual property products slowed sharply (4.6 percent vs 21 percent). 

Meantime, government spending rose by 5 percent, faster than a 3.3 percent gain in the prior quarter. Also, net external demand contributed positively to the GDP growth as imports fell faster than exports. Imports of goods dropped 0.8 percent (vs 7.7 percent in Q3) and those of services grew 2 percent (vs 2.5 percent in Q3), while exports of goods dropped 0.2 percent (vs 5 percent in Q3) and those of services went up 2.9 percent (vs 3.4 percent in Q3).

Considering 2018 the whole year, the economy grew by 3 percent, less than than the government's forecast of 3.2 percent and after a 3.8 percent expansion in the preceding year.

For 2019, the government expects the economy to grow between 2 to 3 percent.

On a quarterly basis, the economy contracted 0.3 percent in the three months to December, compared to a 0.1 percent growth in the prior quarter. Exports of goods  contracted 2.7 percent (vs 1.2 percent in Q3) while those of services grew by 0.7 percent (vs 0.5 percent in Q3). Meantime, imports of goods declined by 5 percent (vs 3.1 percent in Q3) while those of services went up 0.1 percent (vs 0.7  percent in Q3). At the same time, private consumption rose by 0.2 percent (vs 0.6 percent) and  government spending grew by 1.4 percent (vs 0.7 percent in Q3). 

Hong Kong Q4 GDP Annual Growth Weakest in Near 3 Years