Hong Kong economic growth eased for a second consecutive quarter in the first three months of year, amid subdued export performance and a slowdown in tourism, official data revealed Friday.
Gross domestic product rose 2.1 percent year-on-year after a 2.4 percent growth in the previous quarter. Growth was in line with economists’ expectations.
The pace of growth has steadily eased from 2.9 in the third quarter of last year.
Meanwhile, the quarterly growth rate doubled to 0.4 percent from 0.2 percent.
Domestic demand was the driver of growth in the first quarter. Private consumption grew 3.5 percent annually, supported by stable labour market conditions in recent quarters. Investments rose 7.3 percent, led by a notable rebound in machinery and equipment acquisition.
Export growth eased to 0.4 percent from 0.6 percent, due to unsteady external environment. A wider decline in exports of travel services and a visibly slower growth in tourist arrivals and weaker tourist spending hurt services exports.
The government said that the labor market remained in a state of full employment, with the seasonally adjusted unemployment rate staying low at 3.3 percent in the first quarter.
“The external unsteadiness, coupled with a strong US dollar, will continue to constrain our export performance,” the government said in a statement. “The recent slowdown in inbound tourism may also weigh on the tourism-related sectors and our services exports.”
However, the government expects domestic demand to remain a stable growth driver and the steady job and income conditions to render support to local consumption. Further, the boost from the package of relief measures in the 2015-16 Budget is also expected to provide a cushion against the external headwinds.
The government retained the 1-3 percent growth forecast for this year. As it expects the abating imported inflation and the notable decline in energy prices to continue, the inflation forecast for this year was cut to 3.2 percent from 3.5 percent. The core inflation prediction for the year was also lowered to 2.7 percent from 3 percent.
The material has been provided by InstaForex Company – www.instaforex.com