Hong Kong’s economy returned to modest growth in the third quarter, helped by improving exports and rising domestic consumption, officials said on Friday.

Gross domestic product grew 1.3 per cent in the three months to September compared to the same period last year, and by 0.6 per cent from the second quarter when output shrank 0.1 per cent from the preceding period.

The result means the southern Chinese city avoided a technical recession, typically defined by GDP contractions in two consecutive quarters.

Exported goods grew by 4.7 per cent over the preceding quarter and “sanguine job and income conditions” helped boost private spending, which rose 2.8 per cent.

“Hong Kong’s trading environment is still subject to a high degree of uncertainty,” the government said in a statement, referring to concerns about the looming “fiscal cliff” of tax rises and spending cuts in the United States.

“Nevertheless, activity in the mainland economy has shown signs of re-acceleration in the more recent months, which should lend support to intra-regional trade going forward,” it said.