Led by inbound tourism and private consumption, Hong Kong’s economy continued to recover in the second quarter of 2023, with real gross domestic product (GDP) growing by 1.5% from a year earlier.
Presenting the latest economic figures and the Half-Yearly Economic Report 2023 at a press conference, Government Economist Adolph Leung also noted that the momentum of recovery softened on the back of the strong rebound in the preceding quarter.
On a seasonally adjusted quarter-to-quarter comparison, real GDP fell by 1.3% in the second quarter.
Total goods exports plunged further by 15.2% year-on-year in real terms in the second quarter amid weak external demand. Exports to the Mainland, the US and the European Union fell sharply.
On the other hand, services exports continued to grow markedly by 22.9% year-on-year, with exports of travel services jumping over eight-fold thanks to a further surge in visitor arrivals.
Domestically, private consumption expenditure rose notably further by 8.2% year-on-year in real terms in the second quarter alongside the continued economic recovery.
Overall investment expenditure reverted to a mild decline of 0.9% amid tightened financial conditions.
The labour market continued to improve in the quarter, with the seasonally adjusted unemployment rate declining further from 3.1% in the first quarter to 2.9% in the second quarter.
As for the residential property market, the number of transactions declined by 13% from the preceding quarter to 12,199. Overall flat prices recorded a 1% decline in the quarter.
Mr Leung said inbound tourism and private consumption will remain the major drivers of economic growth for the rest of the year, noting that visitor arrivals should increase further with the continued recovery of transportation and handling capacity.
“The improving economic situation and prospects should bode well for domestic demand, though tight financial conditions may impose constraints.
“Improved labour market conditions and the Government’s various measures that boost the momentum of the recovery will provide additional support to private consumption. Yet, the difficult global economic environment will continue to weigh on Hong Kong’s exports of goods.”
Taking into account the actual outturn in the first half and all preceding factors, real GDP growth forecast 2023 as a whole is revised to 4-5% from 3.5-5.5% in the May review.
Looking ahead, overall inflation should stay moderate in the near term. The forecast rates of underlying and headline consumer price inflation for 2023 are revised down to 2% and 2.4% respectively, from 2.5% and 2.9%.
Date: 2023.08.11