Cool down: Government Economist Kwok Kwok-chuen forecasts the local economy will continue to moderate, with second quarter GDP growth slowing to 4.2%.

The economy grew moderately in the second quarter with GDP rising 4.2% after a 7.3% surge in the first quarter, Government Economist Kwok Kwok-chuen says. Further moderation is expected for the rest of the year.

Taking into account the 5.8% economic growth in the year's first half together with the global economic slowdown and inflation, the GDP forecast for the whole year is unchanged at 4%-5%.

Mr Kwok said today the moderation after a prolonged period of robust economic expansion shows the drag the advanced economies' slowing growth and lingering financial market turbulence is having on Asia's economic growth.