Economy eases to 4.3% in Q2 as goods exports accelerate

GDP growth slows from 5.9% in Q1, advance estimates showed.

Hong Kong’s economy expanded by 4.3% year-on-year in the second quarter (Q2), slowing from the 5.9% growth recorded in the previous quarter, according to advance government estimates.

On a seasonally adjusted quarter-on-quarter basis, GDP contracted by 0.6%, according to the Census and Statistics Department.

A government spokesperson said the economy continued to expand in Q2, underpinned by external trade and domestic demand.

The government expects growth to continue in the second half, supported by global demand for artificial intelligence-related products, visitor arrivals, and demand for financial and business services.

However, geopolitical tensions in the Middle East, uncertainty over US monetary policy and protectionist trade measures amongst major advanced economies remain key challenges.

Growth in private consumption expenditure slowed to 2.9% from 4.9% in the previous quarter. Government consumption expenditure increased by 0.5%, compared with 2.8% previously.

Gross domestic fixed capital formation rose by 4.6%, easing from the 18.3% increase recorded in Q1.

External trade remained the main growth driver. Total exports of goods increased by 28.8% in real terms, accelerating from 23.8%, whilst imports of goods rose by 29.3%, compared with 29.9% in the preceding quarter.

Exports of services grew by 3.4%, slightly higher than the 3.3% increase in the first quarter. Imports of services rose by 2.8%, slowing from 3.8%.

Revised second-quarter GDP figures, more detailed statistics and an updated full-year growth forecast will be released on 14 August.v