GDP growth hits seven year high as economy surges 4.7% in Q1

Strong private consumption levels and exports buoyed the domestic economy.

Hong Kong opened the year on solid footing after GDP rose 4.7% YoY in Q1 to post its strongest showing since the second quarter of 2011, according to Standard Chartered Research. 

Private consumption expenditure led the quarterly growth after rising 8.6% YoY which added around 5.7ppt to headline growth.

“Both consumer durables (+25.7% y/y) and non-durables (+13.9% y/y) contributed to the surprise, while spending on services accelerated for a seventh straight quarter to 6.0% y/y; all attributable to a tight labour market (the unemployment rate is at a 20-year-low of 2.9%) and resilient asset prices,” noted Standard Chartered.

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Hong Kong registered strong consumption levels even as underlying consumer price inflation rose 2.4% in Q1 which is likely to extend over the rest of the year should the economy maintain its upward trajectory.

Investment and net services exports also buoyed economic growth. Hong Kong’s total goods exports rose 5.2% YoY in Q1.

The residential market also remained heated in Q1 as trading volume rose 14% YoY and home prices climbed by another 4% between December to March.