GDP growth slows on global uncertainty
Hong Kong's economic output grew 5.1 per cent year on year between April and June, and the government maintained its forecast for it to grow by 5 to 6 per cent this year. Still, it is concerned that problems elsewhere continue to put the global economy at risk.
The pace of growth slowed from the first quarter when gross domestic product (GDP) rose 7.5 per cent year on year. On a quarter-to-quarter basis GDP contracted by 0.5 per cent from the first quarter.
Acting government economist Andrew Au Sik-hung said: 'We expect the level of uncertainty in the external environment to remain unusually high in the rest of the year ... Under such circumstances the financial markets could remain volatile in the period ahead.'
With goods exports also taking a hit - attributed in part to Japan's earthquake and tsunami disrupting supply chains - domestic demand was the strongest contributor to economic growth, with unemployment low at 3.5 per cent.
Rising food prices and rents contributed heavily towards a rise in inflation - up 1.3 percentage points from the first quarter to 5 per cent. Au warned the trend could worsen with the US deciding to keep interest rates very low until at least 2013.