Hong Kong Economic Forecast

Hong Kong Economic Outlook

April 24, 2018

Last year’s upbeat momentum persisted in the first quarter on the strength of both domestic and external demand. Healthy retail sales in the first two months of the year and full employment through March will likely translate into strong household spending, which posted impressive gains late last year on booming asset values and the rebound in tourism. Although survey data through the first quarter pointed to solid gains by the private sector, a slowdown in mainland Chinese demand in March suggests that economic activity could face stronger headwinds over the coming months. Encouragingly, exports posted sizeable gains across most major markets in the first two months of the year, easing earlier concerns that trade flows through the city had slumped at the outset of the year.

Hong Kong Economic Growth

Despite a robust first quarter, economic growth appears set to moderate somewhat later this year as trade concerns mount over mainland Chinese demand, offsetting otherwise strong global tailwinds. Stronger government spending and buoyant asset prices will support domestic demand, although higher interest rates could cool the red-hot property market. Met the why particular panelists expect growth of 3.1% in 2018, up 0.2 percentage points from last month’s forecast, and 2.6% in 2019.

Hong Kong Economy Data

20132014201520162017
Population (million)7.27.37.37.47.4
GDP per capita (USD)38,17511,11342,31943,544-  
GDP (USD bn)276292309321-  
Economic Growth (GDP, annual variation in %)3.12.82.41.9-  
Domestic Demand (annual variation in %)4.02.91.52.6-  
Consumption (annual variation in %)4.63.34.81.8-  
Investment (annual variation in %)2.6-0.1-3.2-0.3-  
Retail Sales (annual variation in %)11.1-0.2-1.5-7.1-  
Unemployment Rate3.43.23.33.4-  
Fiscal Balance (% of GDP)0.83.40.6-  -  
Public Debt (% of GDP)0.50.10.10.1-  
Money (annual variation in %)12.49.55.57.7-  
Inflation Rate (CPI, annual variation in %, eop)4.34.92.31.2-  
Inflation Rate (CPI, annual variation in %)4.34.43.02.4-  
Inflation (PPI, annual variation in %)-3.1-1.7-2.71.3-  
Benchmark Interest Rate (%)0.380.380.391.02-  
Stock Market (annual variation in %)2.91.3-7.20.4-  
Exchange Rate (vs USD)7.757.757.757.75-  
Exchange Rate (vs USD, aop)7.767.757.757.76-  
Current Account (% of GDP)1.51.43.34.6-  
Current Account Balance (USD bn)4.24.111.314.9-  
Trade Balance (USD billion)-64.8-70.9-57.1-54.5-  
Exports (USD billion)459474465462-  
Imports (USD billion)524545523517-  
Exports (annual variation in %)3.63.2-1.8-0.6-  
Imports (annual variation in %)3.84.0-4.1-1.1-  
International Reserves (USD)311329359386-  
External Debt (% of GDP)421446420415-  

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Hong Kong Facts

ValueChangeDate
Bond Yield2.373.38 %May 21
Exchange Rate7.85-0.11 %May 21
Stock Market31,234-1.92 %May 21

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