Wednesday, 1 November 2023

Hong Kong GDP grows in 3rd quarter, but falls short of economists’ expectations


Hong Kong GPD grows in 3rd quarter, but falls short of expectations

Hong Kong’s economy received a boost from returning tourists and local spending, according to government figures released Tuesday, but its growth in the third quarter still missed expectations.

West Kowloon Station National Day
Tourists arrive at West Kowloon Station by high-speed rail on National Day, October, 1, 2023. Photo: Hans Tse/HKFP.

Real gross domestic product between July and September rose by 4.1 percent from a year earlier, according to the Census and Statistics Department’s advance estimates.

This came in below economists’ estimate of 5.2 percent growth, Bloomberg News reported.

The Chinese finance hub has lagged behind regional rivals like Singapore after nearly three years of pandemic curbs, which were mostly dropped by late 2022.

A government spokesman on Tuesday credited the third-quarter economic bump to “inbound tourism and private consumption”.

“Private consumption expenditure increased further alongside rising household income and the government’s various support initiatives, though the rate of increase moderated somewhat,” he said.

Private consumption increased by 6.5 percent, while the export of services rose by 24 percent on-year during the period.

Exports of goods fell 8.6 percent, which authorities attributed to weak external demand.

“Inbound tourism and private consumption will continue to underpin economic growth for the rest of the year,” the spokesman said, adding that the city could also receive more visitors as handling capacity further recovered.

mainland tourists
Tourists take photos in Hong Kong in the summer of 2023. File photo: Kyle Lam/HKFP.

“Yet, the difficult external environment amid increasing geopolitical tensions and tight financial conditions would continue to weigh on exports of goods and investment and consumption sentiment.”

Hong Kong entered a deep recession in 2019 and 2020 after the former British colony was roiled by pro-democracy protests and the start of the pandemic.

The city found brief respite in 2021, as its strict Covid-19 controls largely kept it virus-free, with the economy rebounding by 6.4 percent — gains that were later wiped out by a 2022 outbreak.

Government officials last November touted the city’s “reopening”, and have announced initiatives to win back foreign businesses and tourists.

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