, Hong Kong

Hong Kong GDP to shrink by 4.0% YoY in Q122: estimates

This will mark the first contraction since Q4 2020.

Advance data showed that Hong Kong's GDP will shrink by 4.0% YoY in Q1 2022, marking its first contraction since Q4 2020.

According to UOB, all major expenditure components will contract in Q1 2022 except for government consumption which is expected to increase by 5.9% YoY.

The gross domestic fixed capital formation is expected to post the biggest decline of 8.3% YoY, followed by private consumption
expenditure (-5.4% YoY), exports of goods (-4.5% YoY), and exports of services (-2.8% YoY).  

Given the expected drop in GDP and the " larger than expected impact from the COVID-19 pandemic outbreak," UOB has downgraded its growth forecast for 2022 to 1.3% from 1.7%.

Looking ahead, UOB sees a recovery in private consumption as the city recovers from the impact of the fifth wave.

The recovery will also likely be supported by "pent-up demand and government’s consumption
vouchers which began distribution for the first phase in early April," UOB said.

"The HK$10,000 digital consumption vouchers announced in Budget 2022/23 are projected to boost the Hong Kong economy by a 1.2% point compared to a smaller boost of 0.7% point estimated for the HK$5,000 consumption vouchers in 2021," the analyst added.

UOB, however, warned that the city's economy will still be "weighed by significant uncertainties ahead."

"Its dynamic zero-COVID approach meant that there are persistent risks that the COVID-19 curbs will be re-tightened (especially with ongoing outbreaks in the mainland) and little prospects that Hong Kong could benefit from tourism
recovery as other countries reopen their borders," UOB said.

"Other risks pertain to high commodity prices that are exacerbated by the Russia-Ukraine conflicts, slowdown in the mainland’s economy and rising domestic interest rates in line with US Fed’s monetary policy tightening," the analyst added.

Follow the link for more news on

Join Hong Kong Business community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

Unemployment rate rises to 5.4% from February to April
The total number of unemployed people stands at 206,100.   The unemployment rate rose by 0.4 percentage points to 5.4%  from February to April, when compared to the January to March period.    Based on the data from the Census & Statistics Department (C&SD), the total number of unemployed people from February to April was 206,100, an increase of 17,600 from the preceding three-month period.   Meanwhile, the number of unemployed rose by around 25,000 to 142,000, translating to a rate of 3.8%.   With the increase in the number of jobless and underemployed individuals, total employment dropped to 3,559,200, whilst the labour force fell to 3,765,300.   The deterioration of Hong Kong’s labour market however should see an improvement in the coming months, according to Secretary for Labour & Welfare, Dr Law Chi-kwong.   The receding local epidemic situation and progressive relaxation of social distancing measures, the new round of Consumption Voucher Scheme, and Other relief measures including the 2022 Employment Support Scheme should help drive improvement in the employment sentiment, said the C&SD.  
Economy