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ReturnChina:HKˊ s economic growth slows to 1.7% in 3rd quarter
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PublishDate：
2008-11-18 15:41:00
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Hong Kong's economic growth slowed notably in the third quarter, with GDP rising 1.7 percent after a 4.2 percent rise in the second quarter, indicated officials figures released here Friday.
"The economy in the rest of the year is likely to be subdued," said Helen Chan, an economist of the Hong Kong Special Administrative Region government, at a press conference here.
Taking into account GDP growth of 4.3 percent in the first three quarters, economic growth for the whole year is forecast at 3 percent to 3.5 percent, revised down from the earlier 4 percent to 5 percent, she said.
The external sector in the third quarter slackened amid faltering global demand, and domestic demand was severely hit by the global financial tsunami that caused significant jitters in local asset markets, said Chan.
SLOW GROWTH
Total goods exports in Hong Kong grew 1.4 percent in real terms in the quarter, the worst performance since the first quarter of 2002. While the U.S. market continued to pose the main drag, exports to other markets also saw different extents of slowdown as the impact of the global downturn increasingly set in, said the government economist.
Hong Kong's service exports still recorded growth of 5.3 percent, although likewise moderated from the second quarter. The slow-down was due to a temporary fall-off in inbound tourism during the Olympics and a further deceleration in exports of financial services amid the financial market distress globally, she said.
Consumption spending still held firm in July and August, but slackened in September as the U.S. financial turmoil escalated into a full-blown global financial tsunami. Private-consumption spending grew only 0.2 percent in real terms over a year earlier.
CAUTIOUS APPROACH
Overall investment spending saw growth of 3 percent in real terms in the quarter. Yet in the more recent period, companies have turned more cautious in making new investments and in hiring, Chan noted.
Along with the economic slowdown, the seasonally adjusted unemployment rate rose to a still relatively low level of 3.4 percent.
"Job prospects have inevitably dimmed as the near-term outlook is clouded by the unsettled global financial market situation," she said.
Headline consumer price inflation fell to 4.6 percent, mainly reflecting the favorable effects of the Government's one-off relief measures.
Underlying inflation has tended to stabilize since July, as the tapering in food inflation offset the enlarged increase in private housing costs.
CPI inflation notched down from 6.3 percent in both July and August to 6.1 percent in September, averaging 6.3 percent in the third quarter, according figures released Friday.
INCREASING RISK
Chan said the financial turbulence erupted into a full-blown global crisis causing significant clogs to financial markets around the world. The credit crunch that ensued has added woes to the already rapidly faltering global economy.
Although there are signs that stability is gradually returning to the global financial markets, the credit markets remain unusually tight and will take time to return to normal functioning. The risk of a more prolonged and protracted global economic downturn has increased.
"For many advanced economies, a recession is already underway. Amid such an uncertain and difficult external environment, Hong Kong's export performance is likely to remain rather lackluster in the near term," she said.
Domestic demand will likewise slow in the period ahead. The substantial fall-off in the stock market, coupled with less promising job prospects, will continue to restrain consumers' propensity to spend, she said.
INFLATION FORECAST
With global commodity prices retreating and the rebound in the U.S. dollar since July, inflationary pressures from the external front are receding, said Chan.
The expected slowdown in the Hong Kong economy will also entail lesser pressures from the domestic economy. But the earlier surges in private residential rentals might continue to feed through to consumer price inflation in the coming months.
"With the favorable effects of the Government's relief measures continuing in the rest of the year, the forecast headline consumer price inflation for 2008 as a whole remains unchanged at 4.2 percent. Netting out the effects of Government measures, the forecast underlying inflation rate is also maintained at 5.5 percent," she said.
Source: Xinhua News
"The economy in the rest of the year is likely to be subdued," said Helen Chan, an economist of the Hong Kong Special Administrative Region government, at a press conference here.
Taking into account GDP growth of 4.3 percent in the first three quarters, economic growth for the whole year is forecast at 3 percent to 3.5 percent, revised down from the earlier 4 percent to 5 percent, she said.
The external sector in the third quarter slackened amid faltering global demand, and domestic demand was severely hit by the global financial tsunami that caused significant jitters in local asset markets, said Chan.
SLOW GROWTH
Total goods exports in Hong Kong grew 1.4 percent in real terms in the quarter, the worst performance since the first quarter of 2002. While the U.S. market continued to pose the main drag, exports to other markets also saw different extents of slowdown as the impact of the global downturn increasingly set in, said the government economist.
Hong Kong's service exports still recorded growth of 5.3 percent, although likewise moderated from the second quarter. The slow-down was due to a temporary fall-off in inbound tourism during the Olympics and a further deceleration in exports of financial services amid the financial market distress globally, she said.
Consumption spending still held firm in July and August, but slackened in September as the U.S. financial turmoil escalated into a full-blown global financial tsunami. Private-consumption spending grew only 0.2 percent in real terms over a year earlier.
CAUTIOUS APPROACH
Overall investment spending saw growth of 3 percent in real terms in the quarter. Yet in the more recent period, companies have turned more cautious in making new investments and in hiring, Chan noted.
Along with the economic slowdown, the seasonally adjusted unemployment rate rose to a still relatively low level of 3.4 percent.
"Job prospects have inevitably dimmed as the near-term outlook is clouded by the unsettled global financial market situation," she said.
Headline consumer price inflation fell to 4.6 percent, mainly reflecting the favorable effects of the Government's one-off relief measures.
Underlying inflation has tended to stabilize since July, as the tapering in food inflation offset the enlarged increase in private housing costs.
CPI inflation notched down from 6.3 percent in both July and August to 6.1 percent in September, averaging 6.3 percent in the third quarter, according figures released Friday.
INCREASING RISK
Chan said the financial turbulence erupted into a full-blown global crisis causing significant clogs to financial markets around the world. The credit crunch that ensued has added woes to the already rapidly faltering global economy.
Although there are signs that stability is gradually returning to the global financial markets, the credit markets remain unusually tight and will take time to return to normal functioning. The risk of a more prolonged and protracted global economic downturn has increased.
"For many advanced economies, a recession is already underway. Amid such an uncertain and difficult external environment, Hong Kong's export performance is likely to remain rather lackluster in the near term," she said.
Domestic demand will likewise slow in the period ahead. The substantial fall-off in the stock market, coupled with less promising job prospects, will continue to restrain consumers' propensity to spend, she said.
INFLATION FORECAST
With global commodity prices retreating and the rebound in the U.S. dollar since July, inflationary pressures from the external front are receding, said Chan.
The expected slowdown in the Hong Kong economy will also entail lesser pressures from the domestic economy. But the earlier surges in private residential rentals might continue to feed through to consumer price inflation in the coming months.
"With the favorable effects of the Government's relief measures continuing in the rest of the year, the forecast headline consumer price inflation for 2008 as a whole remains unchanged at 4.2 percent. Netting out the effects of Government measures, the forecast underlying inflation rate is also maintained at 5.5 percent," she said.
Source: Xinhua News
