Private consumption up 9.2% in Q2 2011
Seems like a good sign for Hong Kong, as private consumption accounts for 61% of its GDP.
According to UBS, monthly retail sales often provide very important clues about the strength of GDP.
Here's more from UBS:
| What the numbers say: The consumer remained the bright spot, for now. Private consumption rose 9.2%y/y in 2Q11, up from 8.0% y/y (9.5% q/q annualised). While monthly retail sales, driven predominately by increased tourist spending, continued to surprise on the upside. What they mean: Private consumption accounts for 61% of Hong Kong’s gross domestic product and thus the economy tracks very closely with consumption. In particular, monthly retail sales often provide very important clues about the strength of GDP. 12-month outlook: The cash handouts from this year’s budget, at an estimated HK$30-36bn, are significant. If we assume that half of the handouts will be spent domestically, the boosts to domestic consumption could be as high as 1.0 to 1.3 percentage points this year. But cyclically, consumption had probably peaked in 2Q11. Recent stock market correction could weigh on consumer confidence. This, plus a weaker labour market going forward (as the cyclical slowdown filter through), should slow consumption growth. |
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