Economy grows 3.3% in Q2

August 16, 2024

Voiceover: 
Hong Kong's economy continued to record moderate growth in the second quarter of this year. 

Real gross domestic product or GDP grew by 3.3% year-on-year, while real GDP increased by 0.4% on a seasonally adjusted quarter-to-quarter comparison.

Domestically, private consumption expenditure turned to a slight decline of 1.5% year-on-year in real terms in the second quarter, mainly affected by the changes in the consumption patterns of residents. 

The labour market stayed tight, while the seasonally adjusted unemployment rate stayed low at 3%.

Total goods exports continued to grow strongly by 7.5% year-on-year in real terms in the second quarter, supported by the sustained external demand for goods. 

The residential property market was very active at the beginning of the second quarter but quietened progressively thereafter as pent-up demand faded. Market sentiment turned increasingly cautious during the quarter as the prospect of US interest rate cuts dimmed. Overall flat prices recorded a 2% decline.

The underlying consumer price inflation remained modest in the second quarter. 

The underlying Composite Consumer Price Index rose by 1% year-on-year, same as that in the preceding quarter.

The real GDP growth forecast for 2024 as a whole is maintained at 2.5%-3.5%.

Government Economist Adolph Leung: 
As for the outlook, the economy should continue to grow in the remainder of the year. Continued local economic expansion should lend support to fixed asset investment, but geopolitical tensions and interest rate uncertainties may dampen business confidence and asset markets. As regards inbound tourism and private consumption, the central government’s various measures benefitting Hong Kong, our strenuous efforts to boost market sentiment and improving employment earnings would provide support, but the changes in the consumption patterns of visitors and residents and the relatively strong Hong Kong dollar may continue to pose challenges.

Voiceover: 
He added that overall inflation should stay mild in the near term.

Taking into account the inflation situation in the first half of the year, the forecast rates of underlying and headline consumer price inflation for 2024 are revised down to 1.3% and 1.9% respectively.

(To watch the full press conference with sign language interpretation, click here.)

The Government today reported that Hong Kong’s economy continued to record moderate growth in the second quarter of 2024, with real gross domestic product (GDP) rising by 3.3% year on year.

It added that it expects the economy to record further growth in the rest of the year.

Government Economist Adolph Leung reported the second-quarter figure as he presented the Half-yearly Economic Report 2024 at a press conference. The real GDP increased by 0.4% on a seasonally adjusted quarter-to-quarter comparison.

Mr Leung highlighted that total goods exports continued to grow strongly, rising by 7.5% in real terms year on year during the second quarter thanks to sustained external demand.

Exports of services declined 1.4%, with exports of travel services turning to a contraction amid changes in visitors’ consumption patterns and the strength of the Hong Kong dollar.

Domestically, the labour market stayed tight in the second quarter, with the seasonally adjusted unemployment rate staying low at 3%. Employment earnings continued to record solid growth.

Private consumption expenditure turned to a slight decline of 1.5% year on year in real terms, mainly affected by changes in residents’ consumption patterns, while overall investment expenditure rose by 6%.

The residential property market was highly active at the beginning of the second quarter but quietened progressively thereafter as pent-up demand faded. Market sentiment turned increasingly cautious during the quarter as the prospect of US interest rate cuts dimmed, with overall flat prices recording a 2% decline.

Consumer price inflation remained modest in the second quarter. The underlying Composite Consumer Price Index rose by 1% year on year.

Looking ahead, Mr Leung said the economy should continue to grow in the remainder of the year.

“Continued local economic expansion should lend support to fixed asset investment, but geopolitical tensions and interest rate uncertainties may dampen business confidence and asset markets.

“As regards inbound tourism and private consumption, the central government’s various measures benefitting Hong Kong, our strenuous efforts to boost market sentiment and improving employment earnings would provide support, but the changes in the consumption patterns of visitors and residents and the relatively strong Hong Kong dollar may continue to pose challenges.”

The real GDP growth forecast for 2024 as a whole has been maintained at between 2.5% and 3.5%.

Mr Leung said overall inflation should stay mild in the near term. The forecast rates for underlying and headline consumer price inflation for the year have been revised down to 1.3% and 1.9% respectively, from the 1.7% and 2.4% announced in May.