Hong Kong Raises 2017 Growth Outlook
August 11 2017 - 4:24AM
RTTF2
Hong Kong's growth outlook for 2017 was upgraded as the actual
growth outturn in the first half of the year was stronger than
expected amid receding downside risks in global environment.
In the first half of 2017, the economy grew 4 percent, the
government said Friday. The real growth outlook for 2017 was
revised up to 3-4 percent from 2-3 percent estimated in May.
Driven by external and domestic demand, gross domestic product
expanded 3.8 percent year-on-year in the second quarter. However,
this was slower than the 4.3 percent increase registered a quarter
ago.
Sequentially, the economy grew at a faster pace of 1 percent
after rising 0.7 percent in the first quarter.
Exports of goods registered an annual growth of 5.6 percent and
services exports advanced 2.3 percent in the second quarter on the
back of increased cross-border financial activities and reviving
regional trade flows.
Domestic sector continued to display strength, Deputy Government
Economist, Andrew Au, said. Private consumption expenditure grew
5.3 percent. At the same time, government expenditure maintained
steady growth of 3.2 percent.
Overall investment spending in terms of gross domestic fixed
capital formation strengthened to show a growth of 8 percent in the
second quarter.
Looking ahead, the government economist said receding downside
risks to the outlook as well as growth momentum in the Mainland
economy should be conducive to the near-term performance of Hong
Kong's exports.
"However, there is still a need to stay alert to the
uncertainties in the external environment, including the pace of US
monetary policy normalization, policy differences among major
central banks and Brexit-related negotiations," the economist
said.
Chang Liu, an economist at Capital Economics, said GDP growth
will slow in the second half of the year as the recent strength in
capital spending won't last. Moreover, the city's overheated
property market remains a major concern, Liu added.
In the second quarter, the underlying inflation rate was 2.0
percent and averaged 1.7 percent in the first half of the year.
As actual inflation outturns so far this year have been somewhat
lower than expected, the forecast rates of underlying and headline
consumer price inflation for 2017 as a whole, were revised slightly
downwards to 1.8 percent and 1.6 percent, respectively.
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