Hong Kong's trade deficit jumps 28% in 2011

Export dependent Hong Kong is in dire danger from its ballooning and persistent trade gap.

Slowing demand for its exports worldwide, especially in the European Union and the United States, slammed Hong Kong with a merchandise trade deficit of HK$427.3 billion, up a staggering 28% from the HK$333.8 billion deficit in 2010.

Imports outpaced exports, growing 11.9% in 2011 against an export growth of 10.1%.

Hong Kong government officials said the outlook for the city's economy and exports in 2012 remains bleak. The International Monetary Fund echoed this sentiment, saying Hong Kong's growth is expected to slow to just 4% in 2012 from the estimated 5.75% in 2011 due to weakening external demand.

"The lingering Eurozone sovereign debt crisis and expected slack in the advanced economies would remain key downside risks to Hong Kong's export performance," said a Hong Kong government spokesman.

The trade deficit, however, increased at a slower pace in December 2011. It rose 12% to HK$48.9 billion from HK$43.5 billion a year earlier.

The value of Hong Kong’s total merchandise exports and imports recorded year-on-year increases, at 7.4% and 8.1%, last month, said the Census & Statistics Department.