Hong Kong avoids recession as GDP edges up

PUBLISHED : Friday, 16 November, 2012, 7:46pm
UPDATED : Friday, 16 November, 2012, 7:47pm

Hong Kong avoided a technical recession when the economy grew a seasonally adjusted 0.6 per cent in the third quarter, reversing its second-quarter decline, according to government figures released on Friday.

The third quarter’s growth followed a 0.1 per cent decline in the preceding quarter. A technical recession means two consecutive quarters of decline.

The growth rate from July to September was 1.3 per cent greater than in the same period last year, and 1.2 per cent more than the second quarter last year.

The government has revised its full-year growth forecast to 1.2 per cent, on the pessimistic side of its earlier estimate in the 1-2 per cent range.

Government economist Helen Chan said Hong Kong’s trading environment remained subject to a high degree of uncertainty due to weak sentiment in Europe and the United States.

“Exports to the EU market recorded a double-digit, year-on-year decline in the third quarter, while those to the US and many major Asian markets were also weak,” Chan said.

Total exports of goods grew moderately, by 4.0 per cent in real terms in the third quarter, over a year earlier.

On consumer prices, Chan said inflation was likely to remain higher than earlier estimates because of a rebound in global food prices, the new round of quantitative easing in advanced economies and the renewed pick-up in local housing rents.

The government’s forecast for headline inflation is 3.9 per cent for the year, with underlying inflation at 4.5 per cent, higher than its August estimates of 3.7 per cent and 4.3 per cent, respectively, she said.