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Hong Kong economy grows at faster pace in Q2

Xinhua, August 14, 2015 Adjust font size:

Hong Kong's economy grew 2.8 percent between April and June from the same period a year ago, according to government data released on Friday. It was the fastest pace since the third quarter last year.

The government released on Friday the Half-yearly Economic Report 2015, together with the preliminary figures on Gross Domestic Product (GDP) for the second quarter of 2015.

Helen Chan, the government economist, said that global economic performance has been weaker than expected so far this year, resulting in a region-wide setback in exports and growth slowdown in Asia. Against this backdrop, Hong Kong's total exports of goods slackened to a decline in the second quarter, down by 3.6 percent in real terms over a year earlier. Exports of services, on the other hand, posted slightly faster year-on-year growth of 1.0 percent in the second quarter.

But the surge in financial services exports more than compensated for the negative impacts from sluggish trade flows and continued weakness in inbound tourism, she said.

The domestic sector remained remarkably resilient in the second quarter, thereby cushioning the overall economy against the lull in external trade. Private consumption expenditure grew strongly by 6.0 percent in real terms over a year earlier in the second quarter, on the back of full employment and rising income.

Investment expenditure also saw solid growth, up 6.5 percent over a year earlier, supported by a notable rebound in building and construction works and further growth in machinery and equipment acquisition, according to the report.

Chan said that looking ahead, the global economic outlook in the near term remains mediocre. Hong Kong's exports of goods are expected to remain weak in the near term. The outlook for exports of services is also overshadowed by the weak trend in inbound tourism, as well as subdued trade flows.

In the face of various external headwinds, Hong Kong's economic growth in the coming two quarters would have to rely on the domestic sector as the key propeller, she added.

In the wake of the accelerated GDP growth, the government has lifted the bottom range of its full-year growth forecast to between 2 and 3 percent - up from 1 and 3 percent in its previous assessment in May.

The government also lowered its annual inflation outlook slightly from 3.2 percent to 3.1 percent. Endi