HK’s economy grew by 2.1% YOY in Q1, falling by 0.6% over a year and 0.3% over the preceding quarter.
HK Government released the First Quarter Economic Report 2015 on 15 May, it showed that HK’s economy grew at a slower pace in the 1Q15, dragged by weaker private consumption and exports amid a slowdown in tourism and a cloudy global outlook. The mainly due to the unstable external environment, a strong US dollar affects the local exports and also the weaker visitor spending and a visible slowdown in tourists coming to HK.
The setback in travel service exports being marked by a slowdown in mainland Chinese tourists coming to HK, which dropped to a low single-digit level in the Q1. The weakening currency of nearby destinations attract mainland shoppers and Chinese government eased its visa rules to people traveling abroad since 2013.
Overall, HK economy is slowing declining but its dynamic is still within the market expectations. Meanwhile in this stage, Hong Kong Government has no effective measures to improve the drop.
Released the First Quarter Economic Report 2015 on 15 May, Acting Government Economist Andrew Au said domestic demand is still the main contributor to economic growth but external demand remains weak.
Due to full employment, earnings growth and upward stock market trends, domestic demand was relatively steady. Private consumption expanded moderately to 3.5% while investment grew 7.3%.
The setback in travel services exports was the main drag, marked by weaker per capital visitor spending and the visible slowdown in tourist arrival growth to a low single-digit level.
Services exports extended the decline in the Q1, falling by 0.6% over a year earlier, after the 0.3% drop in the preceding quarter.
“The slowdown will affect the retail trade and other tourism related sectors. Given that the inbound tourism sector accounts for 6% of HK’s total employment, the slowdown, if it continues, could have implications for our labour market conditions to which we need to stay alert,” Mr Au said.
With abating imported inflation, a notable fall in energy prices and moderate local cost pressures, underlying consumer price inflation eased faster than expected to 2.7%.
The 2015 underlying consumer price inflation forecast was revised downward to 2.7% from 3% in the Budget. The GDP growth forecast for 2015 remains at 1% to 3%.