Export data confirms key rebound role
The latest government statistics have provided further evidence that Hong Kong is undergoing an export-led rather than domestically driven economic recovery.
The Census and Statistics Department yesterday estimated the economy grew a year-on-year 4.5 per cent in the third quarter - unchanged from last month's assessment.
However, it revised upwards estimates for growth in the first and second quarters.
First-quarter gross domestic product was revised up from a 3.2 per cent contraction to 3 per cent, while second-quarter growth was raised from 0.7 per cent to 1.1 per cent.
Bank of East Asia chief economist Shamus Mok Chung-yuk said exports of goods had rebounded strongly to 8.1 per cent growth in the third quarter from a year earlier.
It was the first increase since the first quarter of last year.
The pick-up in exports was mirrored in outward cargo figures issued yesterday that showed 19 per cent growth to 17 million tonnes in the third quarter from a year earlier.
According to the Government, the sharp turnaround was driven by a recovery in exports to all key markets.
Dao Heng Bank senior economist Daniel Chan Po-ming said exports of services had also showed respectable 10.2 per cent year-on-year growth in the third quarter, up from the 2.4 per cent increase in the second quarter.
He attributed the increase to better tourist arrivals during the quarter.
Offshore trade activities surged and exports of business services rose with the region's recovery, the Government said.
The decline in investment in the economy by the private sector slowed to 10.8 per cent from 26.1 per cent in the second quarter.
Mr Mok said the slower decline was driven by the start of construction at key infrastructure projects such as the West Rail, which had pushed private contractors to invest in extra capacity.
The robust export performance was in contrast to weak growth in domestic consumption.
This saw 3 per cent year-on-year growth in the third quarter from a 1.3 per cent increase in the second quarter.
Both Mr Mok and Mr Chan agreed private consumption expenditure remained sluggish.
'The deflationary environment forces retailers to go for much higher volume before they can achieve a small growth in value terms,' Mr Mok said.
Mr Chan said: 'The weakness of growth in private consumption expenditure may extend to the first quarter next year, because companies will still be in the process of restructuring.
'But private sector investment will pick up when the mainland enters the WTO.'
