Hong Kong's economy grew a measly 0.8% in Q12016

It's the slowest pace since mid-2012.

The latest GDP print indicates that Hong Kong's economy grew at its slowest pace since mid-2012, as GDP growth eased to 0.8% y-o-y over Q1-16. In fact, in sequential terms, the economy actually shrunk by 0.4% q-o-q, the first sequential contraction since 2014.

This was according to a research note from HSBC Global Research. It also noted that subdued global demand has been weighing heavily on Hong Kong's trade performance, with both export and imports registering sharp contractions.

Exports of services have softened, amidst the slowdown in tourist arrivals and weaker visitor spending. The sharp falls in tourist arrivals coupled with the relative strength of Hong Kong's dollar have been weighing heavily on retail performance, with retail sales remaining in a deep contraction for over a year now.

Here's more from HSBC Global Research:

Recent global financial market volatility has also taken a toll on economic sentiment and weighed on domestic demand as well. Private consumption expenditure only managed to clock mild growth of 1.1% y-o-y, the slowest rate of expansion since 2009. Finally, the property market continued to soften as prices declined and transactions cooled.

Looking ahead, while the relief measures announced in the 2016-2017 budget should provide some support to the economy, risks to growth remain on the downside, at least in the near term. Stabilisation in the Mainland economy and faster growth in the United States in the coming quarter should help.

But uncertainties associated with the Fed's rate trajectory and increasing policy divergence among major central banks could weigh on activities and sentiment. HSBC Global Research forecasts overall GDP growth to slow to 1.5% in 2016, down from 2.4% in 2015.