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Denise Tsang

Oscar Liu

Recent strength in Hong Kong’s economy petered off in the third quarter, with growth at 1.8 per cent year on year, prompting a revision of the government’s full-year forecast in the middle of November.
The Census and Statistics Department, which released advance estimates on Thursday, said it would revise the gross domestic product (GDP) figure and offer more detailed statistics for the third quarter on November 15.
The GDP figure slowed from a year-on-year growth of 3.2 per cent in the second quarter. In the first nine months, the economy expanded 2.6 per cent over the same period last year.
Some analysts said slower growth meant the government’s full-year forecast was “well out of reach”, and expected it to downgrade it.
The government’s full-year forecast is for growth of between 2.5 and 3.5 per cent.
“The Hong Kong economy continued to expand, though at a moderated pace, in the third quarter of 2024 over a year earlier,” a government spokesman said. “The economy should continue to grow in the remainder of the year.”
He said while global economic uncertainties and trade conflicts might affect Hong Kong’s exports of goods, monetary easing across major central banks and an improved outlook for the mainland Chinese economy following the recent introduction of a wide range of stimulus measures would help support sentiment and activities in the domestic market.
Financial Secretary Paul Chan Mo-po earlier described the economic figures for the third quarter as “not that great”, even as he struck an optimistic tone for the future.
GDP shrank by 1.1 per cent in the third quarter from the second one.
Private consumption expenditure, a key component of GDP, declined by 1.4 per cent year on year and 1.6 per cent in the third quarter from the second.

Some analysts attributed the weak consumption to an unstoppable crowd of Hongkongers heading off for leisure travel and across the border for entertainment and shopping, with the trend so strong it offset inbound mainland tourists, who came in fewer numbers and spent less.
Government consumption expenditure rose 2.1 per cent between July and September over a year earlier compared with a 2.2 per cent year-on-year rise in the second quarter.
In the first nine months, exports of goods grew 10.7 per cent over the same period last year, while imports increased 7.1 per cent.
Hong Kong welcomed 32 million visitors in the first nine months of 2024, a 39.7 per cent increase year on year, according to the Tourism Board. Among the visitors, 77 per cent of them were from the mainland.
The board earlier estimated 46 million visitors would come to the city this year, or about 70 per cent of the record 65.16 million arrivals in 2018.
London-based research institute Capital Economics cut its full-year GDP forecast to 2.5 per cent from 3.5 per cent previously and said the government’s estimate was “well out of reach”.
Still, the institute’s China economist, Leah Fahy, said the outlook was not totally gloomy.
“There are reasons to think the immediate outlook is a little brighter,” she said.
“We expect the Hong Kong dollar to weaken alongside the US dollar as the [United States Federal Reserve] cuts [interest rates] further.
“That should support goods exports and drive up tourist arrivals, which remain well below pre-pandemic levels despite their recent uptick.”
The government spokesman said measures floated in Chief Executive John Lee Ka-chiu’s recent policy address would create “new impetus for Hong Kong’s economic development”.
He pointed to examples such as developing a global gold trading market, cementing the city as an international financial centre, establishing a commodity trading ecosystem, driving maritime services and promoting financial and professional services.
DBS Bank economist Samuel Tse said the Federal Reserve’s decision to cut interest rates by half a percentage point in September, the first reduction in four years, would help shore up spending and spur investments.
“There may be some positive impact on the economy in the fourth quarter of this year,” he said.
DBS estimated Hong Kong’s economy would grow by 2 per cent this year and another 2 per cent next year.


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Full-year forecast to be revised as recent strength in Hong Kong economy peters out

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Full-year forecast to be revised as recent strength in Hong Kong economy peters out

Hong Kong economy grew 1.8 per cent year on year in the third quarter