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Hong Kong Economy Latest Developments

By October 13, 2021No Comments
Last published by HK Office of the Government Economist:8 October 2021


Gross Domestic Product and its major components (PDF) (Excel)

Latest situation
The Hong Kong economy remained on track for recovery in the second quarter of 2021, with real GDP continuing to grow notably by 7.6% over a year earlier alongside the improving global economic conditions and receding local epidemic. Yet the economic recovery remained uneven, with exports of goods surpassing the high recorded in the same period of 2018 by a considerable margin while inbound tourism remaining frozen. Looking ahead, the reviving external demand should continue to support Hong Kong’s exports of goods in the rest of the year, and services exports should likewise sustain growth. Nevertheless, the recent surge in the Delta variant cases around the world poses a threat to the global economy. On the domestic front, the improving labour market, coupled with the boost from the Consumption Voucher Scheme, will help stimulate consumption sentiment and lend support to consumption-related sectors. Considering the robust real GDP outturn in the first half of the year and the support from the Consumption Voucher Scheme, the real GDP growth forecast for 2021 as a whole is revised upwards to 5.5%-6.5%. Underlying consumer price inflation is forecast at 1% in 2021.

External sector (PDF) (Excel)

Latest situation
The value of merchandise exports sustained notable year-on-year growth of 25.9% in August. Exports to the Mainland, the US, the EU and many other Asian economies showed visible increases.

For the first eight months of 2021 as a whole, total merchandise trade value amounted to $6,509.9 billion, surpassing the high in the same period in 2018 by 12.8%.Looking ahead, the global economic recovery and vibrant regional trade flows should continue to support Hong Kong’s export performance in the near term. Yet, the pandemic development is still casting uncertainties on the economic outlook. Other risk factors such as China-US relations and heightened geopolitical tensions also warrant attention. The Government will monitor the situation closely.

Prices (PDF) (Excel)

Latest situation
The underlying consumer price inflation rate went up slightly to 1.2% in August, as the year-on-year increases in prices of some CPI components such as meals out and takeaway food as well as clothing and footwear widened somewhat amid the stabilised local epidemic situation. Nonetheless, pressures on many other components remained modest.
Looking ahead, while domestic and external price pressures may build up further in the near term alongside the economic recovery, the underlying inflation should remain largely moderate as the local economy is still operating below capacity. The Government will continue to monitor the situation closely.

Labour market (PDF) (Excel)

Latest situation
The labour market continued to improve, thanks to the economic recovery. The seasonally adjusted unemployment rate fell by 0.3 percentage point from May – July 2021 to 4.7% in June – August 2021. The underemployment rate also decreased by 0.2 percentage point to 2.2%. Meanwhile, total employment increased by 1 700 to 3 651 700, and the number of unemployed persons went down by 10 700 to 187 700.
Looking ahead, the labour market should see further improvement as the economy continues to recover. The Government’s disbursement of electronic consumption vouchers will continue to render support to consumption-related activities. Yet, with the spread of the more infectious Delta variant in many places around the world, the global pandemic remains a key source of uncertainty over the economic and labour market outlook. To help realise a full economic recovery and hence further improvement in the labour market, it is essential for the community to strive towards more widespread vaccination. The Government will continue to monitor the situation closely.

Retail and other economic indicators (PDF) (Excel)

Latest situation
The year-on-year growth in the value of total retail sales picked up notably to 11.9% in August, thanks to the boost from the Consumption Voucher Scheme (CVS). The stable local epidemic and improved labour market conditions also contributed.
Looking ahead, the CVS should continue to bode well for local consumption sentiment in the rest of the year. Nevertheless, keeping the epidemic under control remains pivotal to a full-fledged recovery of the retail sector and the overall economy. It is thus essential for the community to strive towards more widespread vaccination.

Other Economic Indicators

Hong Kong population (PDF) (Excel)

Regional headquarters/offices and external investments (PDF) (Excel)

Asset market, exchange rates and interest rates (PDF) (Excel)


Source: https://www.hkeconomy.gov.hk/en/situation/development/index.htm


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