GNI contracted 7.1% to $679b in Q1

Investment income inflow and outflow both fell.

Hong Kong's gross national income (GNI) dipped 7.1% in Q1 to $679b at current market prices, according to the Census and Statistics Department (C&SD).

As the gross domestic product (GDP) fell 6.3% YoY to $662.9b in Q1, the report noted that the value of GNI was larger than GDP by $16b, which was equivalent to 2.4% of GDP. This gap was mainly attributable to a net inflow of investment income.

Hong Kong's GNI slipped 9.8% YoY in real terms in Q1, whilst the corresponding GDP in the same quarter decreased by 8.9% in real terms.

The total inflow of primary income, which mainly comprises investment income, fell 6.3% YoY to $346.1b and is equivalent to 52.2% of GDP. Meanwhile, total primary income outflow went down 4.7% YoY over the same period to $330b, which is 49.8% of GDP.

As for the major components of investment income inflow, direct investment income (DII) declined by 3.3% YoY in Q1, no thanks to a dip in earnings of some prominent local enterprises from their direct investment abroad. Portfolio investment income (PII) crashed 11.8% YoY, attributed to the decrease in dividend income received by resident investors from their holdings of non-resident equity securities.

Regarding the major components of investment income outflow, DII dropped 2.9% YoY for the same reason above, whilst PII fell 6% YoY from a decrease in dividend payout to non-resident investors from their holdings of resident equity securities.

China continued to be the largest source of Hong Kong's total primary income inflow in Q1 accounting for 42.8%, followed by the British Virgin Islands (BVI) at 24.7%. As for the total primary income outflow, the BVI and the mainland of China remained the most important destinations in the quarter, accounting for 27.3% and 25.8%, respectively.