Hong Kong export growth misses forecast

Last year's disappointing gain of 3.6pc amid global weakness fails to dim economists' hopes

PUBLISHED : Tuesday, 28 January, 2014, 1:35am
UPDATED : Tuesday, 28 January, 2014, 1:35am

Hong Kong's exports grew more slowly than expected last year, at just 3.6 per cent, but economists see brighter times ahead.

The growth, which lagged economists' forecasts of a rise of 4 to 5 per cent, underscored a weak economic recovery in the United States and disappointing demand in Europe in the wake of the 2008 global financial crisis, they said.

However, some economists expected better prospects this year on the back of recent strength in the US recovery while Europe's turmoil hit its bottom.

"The recent improvement in global economic conditions, if it continues, could support Hong Kong's external trade" in the future, a government spokesman said yesterday.

"The trade environment is still vulnerable to various uncertainties, particularly the future path of the Federal Reserve's monetary policy and its possible impact on emerging-market economies, alongside the uneven recovery of the euro-zone economy."

Hong Kong exports were flat at HK$310.9 billion last month after a year-on-year jump of 5.8 per cent in November, the government said.

For the full year, exports rose 3.6 per cent while imports were up 3.8 per cent, leaving a trade deficit of HK$501 billion.

"The world's economic recovery this year will be led by developed economies, largely the US and Europe, instead of emerging markets as in previous years," said Bank of East Asia chief economist Paul Tang Sai-on. "Emerging markets will face more uncertainty as a result of the US decision to slow its bond purchase programme, or the so-called tapering."

Hang Seng Bank economist Ryan Lam estimated exports would grow 6 per cent this year, while Tang tipped a rise of 7 per cent. The Trade Development Council forecast a 5.5 per cent increase.

Stanley Lau Chin-ho, from the Federation of Hong Kong Industries, said overseas buyers were cautious about placing orders with Hong Kong exporters, which reflected a lack of confidence.

"Hong Kong exports are likely to remain lacklustre in the first half of this year," he said. "The US market is likely to perform better this year, but we don't see the European economy recovering until next year."

Lau said many mainland-based Hong Kong exporters faced challenges from soaring wages, volatile overseas demand, a gain in the yuan and the central government's policy of shifting to a service-based economy from an export-led one.

Earlier this month, business leaders including Fung Group chairman Victor Fung Kwok-king said the US was en route to a broad-based recovery while Europe was no longer at risk of falling off a cliff.