HK’s real GDP expands by 2.5%

It’s mainly driven by domestic demand.

According to Hang Seng Bank, GDP data released last week suggest that Hong Kong’s economy is still on a recovery trend.

In line with the bank’s expectations (+2.7%), the city’s real GDP expanded by 2.5% in 1Q14, following growth of 2.9% in the last quarter of 2013.

Here’s more from Hang Seng Bank:

Two notable big picture observations stand out. The first is the sturdy growth momentum in sequential terms.

On a seasonally adjusted quarter-on-quarter basis, Hong Kong’s GDP expanded 0.2% in 1Q14, marking the 11th consecutive quarter of positive growth.

The second is that growth continues to be mainly driven by domestic demand. Domestic demand added 2.6 percentage points to GDP growth in 1Q14.

The recorded slowdown in capital spending was a major disappointment, as messages from monthly proxies for capital spending were relatively healthy in 1Q14.

Export growth was subdued, while private consumption also experienced a deceleration.