Hong Kong’s economy in the first quarter expanded modestly by 0.6% over a year earlier, slower than the preceding quarter’s 1.2% growth.

As a result of the uncertainties stemming from Sino-US trade tensions, total exports of goods weakened further to show a year-on-year decline of 4.1% in real terms in the first quarter.

Exports of services also decelerated to 1.1%.

Delivering the First Quarter Economic Report 2019 today, Government Economist Andrew Au said although Sino-US trade tensions have escalated again over the past week, both sides reiterated that they would continue to negotiate.

“If a trade deal can be reached shortly, this would boost global economic sentiment and render solid support to Asia’s exports including Hong Kong’s exports later this year.”

Domestic demand weakened in the first quarter as compared with a year earlier. Private consumption expenditure only showed marginal expansion of 0.2% year-on-year in real terms.

Overall investment expenditure continued to fall by 7.1% as business sentiment has turned cautious since the latter part of last year. 

In contrast, the residential property market rebounded in the first quarter. The number of transactions jumped by 55% to 13,900 over the preceding quarter. Flat prices increased by 5% during the first quarter.

The Government will leave unchanged its full-year GDP growth forecast of 2% to 3% as announced in the Budget.

Both the headline and underlying consumer price inflation forecasts for this year will also remain unchanged at 2.5%.

The Government will continue to closely monitor developments on both the external and local fronts in the coming months and review this year’s economic growth forecast in August.