The Hong Kong economy grew moderately in the second quarter of 2013 as local consumption and spending by inbound tourists helped make up for continuing weaknesses in demand from the advanced markets that the city export to, said government economists.
Hong Kong’s economy posted a 3.3 per cent growth in the second quarter over a year ago, up from a 2.9 per cent growth recorded in the first quarter, the government said on Friday.
On a seasonally quarter-to-quarter basis, the real gross domestic product growth was 0.8 per cent for the second quarter. This was up from the 0.2 per cent in the first quarter.
Acting Government Economist Andrew Au said domestic demand continued to be the key growth driver as the external sector was still constrained by an unsteady global economic environment.
“Excluding the substantial increase in exports of non-monetary gold in the quarter, export performance was actually rather lacklustre,” Au said.
Total exports of goods grew by 6.2 per cent in real terms in the second quarter over a year earlier, slower than the 8.8 per cent growth in the first quarter.
The advanced markets remained the weak spots in the second quarter. Exports to the United States, Europe and Japan shrank compared to their levels a year ago and exports to the major Asian markets the mainland, Taiwan and Singapore slowed down.
Domestically, private consumption expenditure rose by 4.2 per cent year-on-year in real terms on the back of favourable job and income conditions.
Investment expenditure reverted to a 6.9 per cent growth after a brief dip in the first quarter, Au said. This was mainly on the acceleration of machinery and equipment acquisition and hectic infrastructure works.
Near-term outlook for the domestic sector should stay rather resilient, he said, with local consumption underpinned by improving job and income conditions.
As for business confidence, a recent business sentiment survey showed that large enterprises were slightly positive on the near-term business outlook. Ongoing infrastructure works and thriving inbound tourism, Au said, should also support the local economy.
Hong Kong’s economic growth for this year would likely lie within the upper-half of the previously announced range forecast of 1.5 to 3.5 per cent, he said.
The government has now narrowed down the range to a rate of between 2.5 and 3.5 per cent.
On price, Au said inflation was expected to edge up in the coming months as past increases in private housing rentals continue to feed through. But he said the increase would be lower than previously expected.
The inflation forecast for the full year was revised downward to 4 per cent from the previous estimate of 4.2 per cent.