Import growth will also slow to 2.3%.
BMI Research notes that the improvement in Hong Kong's merchandise trade flows has extended into 2017, which coincided with the cyclical recovery experienced by mainland China, with the city's total exports and imports expanding by 9.3% y-o-y and 9.0% y-o-y (on a three-month moving average [3mma] basis), respectively, in May.
"We are therefore upgrading our 2017 overall export and import growth forecasts to 5.4% and 5.6%, respectively (versus 0.8% and 1.2% previously), to reflect the strong performance experienced in the first five months of the year. That said, this strong performance is unlikely to be sustained given the headwinds to the mainland Chinese economy from tightening monetary policy and an easing of the expansionary fiscal policy, coupled with continued uncertainty with respect to global trade protectionism. As such, we are forecasting Hong Kong's export and import growth to slow to 2.2% and 2.3%, respectively in 2018," said BMI Research.
Do you know more about this story? Contact us anonymously through this link.