Economic growth in Hong Kong to slow, dragged down by weak private consumption and investment in construction

Forecast from Hong Kong University expects gross domestic product to grow by 3.2 per cent in the third quarter of the year, lower than the 3.6 per cent and 4.3 per cent in the second and first quarter

PUBLISHED : Thursday, 06 July, 2017, 6:11pm
UPDATED : Thursday, 06 July, 2017, 11:18pm

Hong Kong’s economic growth is expected to slow in the coming three months, dragged down by weaker private consumption and construction investment, according to a Hong Kong University survey released on Thursday.

The university’s quarterly Hong Kong Macroeconomic Forecast put the city’s gross domestic product growth at 3.2 per cent in the third quarter of the year, lower than the 3.6 per cent and 4.3 per cent in the second and first quarter.

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The forecast came despite a robust private sector performance in the previous quarter, which saw the Nikkei Hong Kong Purchasing Managers’ Index – a gauge of the sector’s health – expanded for the first time in three years.

According to the survey, private consumption is expected to record much slower growth at 3.1 per cent, compared with 3.9 per cent in the previous quarter. It also predicted the growth for fixed capital formation in the land and construction sector to slow to 9.5 per cent from 10.1 per cent.

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The unemployment rate is also expected to rise slightly to 3.3 per cent in the third quarter from 3.2 per cent, the survey shows.

However, exports of services, including tourism related sectors, are likely to keep their momentum and grow 3.4 per cent, up from 2.8 per cent in the last three months.