It's the highest rate since 1Q11.
With an acceleration of consumer spending and increased property investment, Hong Kong’s gross domestic product (GDP) grew by an annual rate of 4.3% in the first quarter – the highest rate since the second quarter of 2011 and far exceeding market expectations of 3.7% and the previous quarter’s growth rate of 3.2%, according to Hang Seng Bank.
Private consumption growth rose from 3.6% in the fourth quarter last year to a six-quarter high of 3.7%, while growth in building and construction jumped from 7.5% in Q4 2016 to 9.6% in the first quarter this year, the fastest pace since the second quarter of 2015.
Here's more from Hang Seng Bank:
With strong household spending and fixed asset investment, domestic demand (excluding inventory changes) contributed 4.2 percentage points to first-quarter growth.
Net exports subtracted 1.1 percentage points from first-quarter growth, the same as in the previous quarter. Imports of goods, in volume terms, surged 9.9%, the biggest increase in four years, to more than offset a 9.2% increase in the volume of exports.
However, increased trade flows might still have made indirect contributions to first-quarter growth by supporting demand for business services and hence overall employment. Indeed, the unemployment rate fell to 3.2% in March from 3.3% in December last year – the lowest rate since May 2015.
We expect trade growth to continue to benefit from the improvement in the external environment. There have been signs that growth in the Eurozone and the US may pick up this year and that growth in mainland China should remain steady.
Meanwhile, strong labour market and favourable financial market conditions should continue to support household spending. We expect private consumption to remain as a main growth driver for the Hong Kong economy.
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