Gross national income slips 1.2% YoY to $755.2b in Q2

It is $78b higher than the GDP.

Hong Kong residents’ total income in the second quarter dipped by 1.2% year-on-year (YoY) in the second quarter to $755.2b, 11% higher than the estimated $667.2b gross domestic product (GDP) which decreased by 0.4% YoY.

In a statement, the Hong Kong government said the $78b gap between the gross national product and the GDP is mainly attributable to a net inflow of investment income.

The NGI dipped by 3.1% YoY, and the GDP by 1.3% in real terms after netting out the effect of price changes.

The market’s total inflow of primary income rose 5.3% YoY during the quarter. It is mainly composed of investment income which is estimated at $503.9b during the period and is equal to 74.4% of the GDP.

Total primary income outflow, meanwhile, slid by 7.9% YoY to around $425.8 b, equivalent to 62.9% of the economy.

For the investment income inflow, direct investment income (CII) rose by 8.9% YoY, due to rise in earnings of some prominent local enterprises from direct investment abroad, the government said.

Portfolio investment income, on the other hand, declined by 3.6% due to the decreased dividend income received by resident investors from holdings of non-resident equity securities.

Meanwhile, DII outflow rose by 7.9% YoY due to the increase in earnings of some multinational firms from direct investment in Hong Kong, whilst PII rose by 3.1% YoY due to the increase in dividend payout to non-resident investors.

The government said mainland China is the largest source of total primary income inflow, accounting for 45.4%, followed by the British Virgin Islands at 19.1%. The two were also the most important destinations for outflow, accounting for 29.3% and 27.7%, respectively.