Exports and domestic demand drive another quarter of strong growth for Hong Kong economy
Government says expansion expected to continue to year’s end
Hong Kong’s economy grew more quickly than expected in the third quarter on this year, at 3.6 per cent over a year ago, thanks to robust exports and vigorous domestic demand driven by strong wealth effects.
The latest GDP figures, heralding the fourth consecutive quarter of above-trend expansion, put the revised growth estimate for 2017 at 3.7 per cent, near the top end of the range of 3 to 4 per cent forecast by the government in August.
And officials said the strong growth would continue for the rest of the year.
Announcing the official figures on Friday, acting government economist Andrew Au Sik-hung said the latest forecast had taken into account growth figure of 3.9 per cent for the first three quarters of this year.
The 3.6 per cent figure for the third quarter surpassed economists’ predictions of less than 3.4 per cent.
“The economy is poised to attain further solid growth in the rest of the year even against a higher base of comparison in the fourth quarter of last year,” Au said.
Benefiting from a broad-based global economic upturn, Hong Kong’s total exports of goods recorded notable growth of 5.5 per cent in the third quarter, with exports to Taiwan, Singapore and Japan attaining double-digit growth.
Exports of services grew by 3.7 per cent, up from the 2.6 per cent in the preceding quarter, signalling the recovery of inbound tourism after three years of decline for the sector.
Private consumption registered robust growth of 6.7 per cent on a year ago.
“Local consumer sentiment was underpinned by the favourable job and income conditions, with added support from a somewhat stronger boost from positive wealth effects,” Au said, adding that the local stock market, which hit record highs, was also a contributing factor.
He said he expected major advanced economies to grow modestly in the rest of the year given an improving global outlook. “The mainland economy is also set to sustain sound and notable growth. The expansion in global demand should bode well for Asia’s and Hong Kong’s goods exports in the near term,” he said.
But Au warned that external uncertainties, such as the US monetary policy normalisation, coupled with the easing of monetary stimuli by other major central banks, might cause repercussions on global financial conditions and capital flows.
Ryan Lam, head of research at Shanghai Commercial Bank, said service export growth showed the worst had passed for local tourism.
However, he said he expected economic growth next year to slow to 2 to 2.5 per cent, due to worse prospects for private consumption.
“Private consumption is a key factor for this year’s economic growth, thanks to the outstanding performance of the stock market. But I doubt it can continue [into] next year,” he said.