Hong Kong's 2.5% GDP in 4Q strongest in 2 years

Will the economy remain bullish this year?

Accordng to Hang Seng Bank, the Hong Kong economy showed clearer signs of recovery in the final quarter of last year, recording a real growth of 2.5% from a year earlier. Not only was the pace of growth faster than the average of 1% for the first three quarters, but it was also the strongest in almost two years. For 2012 as a whole, the economy grew 1.4%. 

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Latest economic data indicate that the growth momentum would continue this year. Both exports and retail sales value recorded double-digit growth in January.

However, it must be noted that with the Lunar New Year falling in February this year but in January last year, year-on-year comparisons are subject to distortions. We expect markets to focus on the February data to ascertain the underlying growth momentum of the local economy. 

In our view, the economy is not without challenges. The next few weeks will likely be filled with questions about how and when the automatic spending cuts in the US will begin to hit the US economy.

In the eurozone, its economy is expected to remain in recession for a second year. Against such a backdrop, Hong Kong’s growth is anticipated to remain at a subpar pace during the first half of the year. For 2013 as a whole, we expect the territory’s economy to expand by 3%.