Hong Kong Budget 2016-2017

Hong Kong Budget 2016-2017

Hong Kong hits four-year low in quarterly economic growth

The economy grew just 0.8 per cent in the first quarter of the year, well short of analysts’ estimates of an uptick of 1.48 per cent

PUBLISHED : Friday, 13 May, 2016, 4:46pm
UPDATED : Friday, 13 May, 2016, 6:35pm

Hong Kong’s economy grew 0.8 per cent in the first quarter of the year, its slowest quarterly growth in four years, under the weight of volatile stock and property markets, weak retail sales and the slowing mainland economy.

The figure fell short of analysts’ estimate of 1.48 per cent, and was down from the 1.93 per cent growth recorded in the fourth quarter of last year.

Financial Secretary John Tsang Chun-wah said in his budget address in February that he expected overall economic growth to slow to 1 to 2 per cent this year, down from 2.4 per cent last year.

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Andrew Au, the government’s principal economist, described the city’s first-quarter performance as “somewhat disappointing but not completely unexpected”.

But he said the government would not change its full-year GDP growth forecast despite the worse-than-expected first quarter figure.

“There are some positive factors emerging recently,” Au said, adding that they might help the city’s second quarter GDP grow faster than the previous quarter.

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The factors included a levelling off in the city’s declining tourist numbers in March and April, better-than-expected first-quarter GDP growth in Europe, as well as positive signals from the US Federal Reserve regarding the US economy.

Au also expected Hong Kong to follow China’s expected L-shaped growth in the near future, and said most economies around the world faced similar prospects.