External trade growth hints at recovery boom
Hong Kong enjoyed its healthiest growth in external trade for almost four years last month as escalating regional demand and steady absorption of goods from major markets kept the economic recovery on track.
Official figures released yesterday showed that exports increased last month by 15.1 per cent to $123.7 billion from a year earlier.
The figures were well above market expectations of about 8 per cent to 9 per cent overall export growth.
It was also the sixth month of positive year-on-year growth, which followed 15 consecutive declines as the region grappled with financial turmoil.
In December, the value of re-exports rose 16.4 per cent to $107.4 billion, while domestic exports were up 7.3 per cent to $16.3 billion.
Imports grew 17 per cent to $133.6 billion over the same time, reflecting the growing wealth effect of a slow, but sustained, economic recovery.
This left a visible trade deficit of $9.9 billion for the month, equal to 7.4 per cent of the value of imports, which compared with a deficit of $6.8 billion, or 5.9 per cent of the value of imports in 1998.
Economists said the figures provided a good indication of the economy's stabilisation, with the continued pick-up in imports evidence of improving consumer sentiment and investment appetite.
The trade improvement in the second half of the year led to an overall annual 0.1 per cent increase over the previous year.
But while re-exports rose 1.7 per cent last year, domestic exports suffered a decline of 9.5 per cent, having endured double-digit falls in six of 12 months.
Overall the visible trade deficit was $43.7 billion last year, or 3.1 per cent of the value of imports.
This was considerably smaller than the 1998 deficit of $81.4 billion.
A Government spokesman said export growth had accelerated markedly in the closing three months of the year, following an upturn in the overall economy in the third quarter.
Apart from continued demand from key trading partners regionally, in Europe and the United States, there may also have been advancements in shipments to avoid possible problems associated with the end of the millennium, the spokesman said.