Government cuts 2015 underlying inflation to 2.7%

And also announced GDP for 1Q15.

The government announced GDP for 1Q15. In 1Q15, Hong Kong’s economy grew by a modest 2.1% y/y and 0.4% q/q in real terms.

According to a research note from Barclays, while external demand was still lacklustre with goods exports expanding only marginally and services exports slackening further due to a drag from slowdown in inbound tourism, domestic demand remained the key source of growth.

Private consumption expenditure (PCE), which measures residents’ consumption in Hong Kong and abroad, grew by 3.5% y/y in real terms.

Here's more from Barclays:

The government also noted that inflation remained on an easing trend in 1Q15, citing the moderation in rent hike in 1Q15 as a reason.

In 1Q15, underlying inflation was 2.7% compared with 3.3% in 4Q14 and an original annual forecast of 3.0% announced by the Financial Secretary during the budget speech on 25 February.

For the full-year forecast for 2015, the government still maintained its original GDP forecast of 1-3% in 2015.

However, its estimate for headline inflation was revised downward from 3.5% to 3.2% and that for underlying inflation was revised down from 3.0% to 2.7% for the full year 2015.