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Hong Kong's gross national product in the third quarter rose 7.2% over a year earlier to $343.9 billion at current market prices. The gross domestic product, estimated at $327.8 billion, recorded a 4.4% increase.
The value of Hong Kong's GNP was larger than GDP by $16.1 billion, showing a net external factor income inflow of the same amount, equivalent to 4.9% of GDP in that quarter.
After netting out price changes effect, GNP rose 9.9% in real terms over a year earlier, which was higher than the corresponding rise of 7.2% for GDP.
Income flow remains sizeable
The Census & Statistics Department said due to a continued strong economic upturn and an enlarged net inflow of external factor income, GNP sustained a robust growth. Both the inflow and outflow of external factor income continued to increase in the quarter, on the back of further economic growth in the world and in Hong Kong.
Flows of portfolio investment income and other investment income even registered significant double-digit growth, spurred by more dividend pay-outs and more vibrant cross-border lending activity globally.
The department also pointed out external factor income inflow and outflow remained sizeable in the third quarter, both equivalent to more than one quarter of the GDP, which reflected not only the highly externally oriented nature of the Hong Kong economy, but also its position as an international financial centre in facilitating external investment activities.
Net income inflow tops $16b
Total factor income inflow into Hong Kong, estimated at $99.9 billion in the third quarter and equivalent to 30.5% of GDP, rose 14.8% over a year earlier. At the same time, total factor income outflow, estimated at $83.8 billion and equivalent to 25.6% of GDP, was up 4.6%.
Taking inflow and outflow together, a net external factor income inflow of $16.1 billion was recorded in the third quarter.
Within total factor income inflow, direct investment income inflow rose 6.4%, mainly due to increased earnings of some prominent local enterprises from investment abroad. Portfolio investment income inflow rose 22%, mainly attributable to an increase in dividend pay-outs by some prominent non-resident publicly listed companies.
Other investment income inflow also surged 38%, mainly due to increased interest income from offshore loans and deposits, which in turn was the combined result of an increase in external assets of the local banking sector and higher interest rates.
Within total factor income outflow, direct investment income outflow dipped 1.8%, while portfolio investment income outflow rose 27%, mainly attributable to rises in dividend pay-outs by a number of resident publicly listed companies.
Other investment income outflow also surged 49.1%, mainly the result of the local banking sector's increased liabilities and higher interest rates.
Mainland remains the largest income source
Analysed by country/territory, the mainland continued as the largest source of Hong Kong's external factor income inflow in the third quarter, accounting for 26.8% of the total inflow.
This was followed closely by the British Virgin Islands, at 23.4%, reflecting continued investment income inflow from this tax haven economy where Hong Kong companies had set up a considerable number of holding companies. Other major sources were the US (9.2%) and the UK(8.8%).
The British Virgin Islands and the mainland remained the most important destinations for Hong Kong's external factor income outflow, accounting for 22.9% and 21.8% of the total outflow in that quarter. Other major destinations were the Netherlands (10.1%) and Japan (7.5%).
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