Hong Kong’s economic growth slowed to 1.5 per cent in the second quarter from a year ago, in the latest sign that expansion is losing momentum, official preliminary data shows.
In comparison, revised official figures found the economy grew by 2.9 per cent in the first quarter.
A government spokesman on Monday said the local economy had continued to recover during this year’s second quarter, led by inbound tourism and private consumption, but momentum had slowed on the back of the strong rebound in the preceding quarter.
“Analysed by major expenditure component, total exports of goods continued to plummet as the external demand for goods remained weak,” the government said.
“Growth of exports of services accelerated as visitor arrivals rose further. Domestically, private consumption expenditure increased notably alongside the continued economic recovery, while overall investment expenditure saw a mild decline amid tightened financial conditions.”
“Looking ahead, inbound tourism and private consumption will remain the major drivers of economic growth for the rest of the year,” it said.
The latest figures also showed expenditure from private consumption increased by 8.5 per cent year on year in the second quarter, following a rise of 13 per cent in the first quarter.
Gross domestic fixed capital formation in the second quarter saw a fall of 1 per cent from a year earlier, compared with an increase of 7.9 per cent during the first.
The total exports of goods over the same period recorded a decline of 15.3 per cent from the year before, after a decrease of 18.9 per cent in the first quarter.
Imports of goods also fell by 16.1 per cent, compared with a previous decline of 14.6 per cent.
Exports of services rose by 22.6 per cent from a year earlier, faster than the increase of 16.6 per cent in the first quarter, while the imports of services rose by 30.2 per cent from a past increase of 20.7 per cent.
A strong recovery of inbound tourism and domestic demand saw the economy improve in the first three months of 2023.
On Sunday, Financial Secretary Paul Chan Mo-po said the economy was on track to improve, but he conceded growth would be slower.
He said private consumption remained the main driver of growth, with retail sales and restaurant revenues set to show significant gains against last year’s figures.
But Cham stressed the need for more creative marketing strategies and activities, better products and services, and developing new impetus for consumption growth to enhance the city’s competitiveness and attractiveness as a tourist destination and events capital.
The government is set to release the latest retail sales statistics for June on Tuesday and the data for restaurant receipts and purchases for the second quarter on Thursday.
Officials have maintained the GDP growth forecast for 2023 as a whole at between 3.5 per cent and 5.5 per cent, following a 3.5 per cent decline in 2022. – SCMP
