Economic growth inches forward at 0.2%

January to March growth compares to 1.4% expansion in Q4 2012.

Analysts attributed the slowdown to the unexpectedly higher than expected cooling off in the Chinese economy to 7.7%. As a result, several leading banks reduced their GDP projections this year after China’s expansion missed estimates in the first quarter.

ANZ cut its forecast to 2.5% from 3.7% after China’s first-quarter data.

The Q1 performance, however, was 2.8% better year-on-year. The government maintained a February projection of full-year growth of 1.5% to 3.5%.

Government economist Helen Chan said the two percentage point range reflected an uncertain global economic environment.

The government is struggling to sustain economic growth while controlling risks in a housing market where prices have more than doubled since the start of 2009.

Chan said that China and Asia provided a cushion that helped Hong Kong's economy, which is driven by trade and financial services, overcome weaker demand in the West.

"Nonetheless, the sustained solid growth of the mainland economy should continue to lend some support to intra-regional trade going forward, to the benefit of Hong Kong," it said.