Economy Grows 7.5% In Q2

Hong Kong’s economy in the second quarter of 2021 grew 7.5% over a year earlier, the Census & Statistics Department announced today.

According to the advance estimates on gross domestic product (GDP) for the second quarter released today, on a seasonally adjusted quarter-to-quarter comparison, GDP dipped 1% in real terms in the second quarter of 2021 compared with the preceding quarter.

Private consumption expenditure rose 6.5% in real terms in the second quarter over a year earlier, while government consumption expenditure grew 2.9%. Gross domestic fixed capital formation climbed 23.7%, much higher than the 4.8% growth in the first quarter.

Over the same period, total goods exports recorded an increase of 20.3% and goods imports grew by 21.4%. Exports of services increased by 2.6% and imports of services was up by 8.4%.

The Government said Hong Kong’s economy is on the path to recovery amid the improving global economic conditions and receding local epidemic. Based on advance estimates, real GDP sustained a notable year-on-year growth of 7.5% in the second quarter on top of the 8% increase in the first quarter.

For the first half of 2021, real GDP grew 7.8% over a year earlier. On a seasonally adjusted basis, real GDP recorded a modest decline in the second quarter from the preceding quarter, mainly reflecting a slowdown in goods exports from the exceptionally strong growth in the first quarter.

Economic recovery, however, remained uneven in the second quarter. While goods exports were robust and surpassed the peak in 2018, tourism remained at a standstill due to the pandemic. Consumption-related activities improved further, but were still notably below their pre-recession levels.

It is therefore essential for citizens to achieve widespread COVID-19 vaccination in order to pave the way for a broader based economic recovery, the Government emphasised.

Total goods exports expanded strongly year-on-year, underpinned by strengthening global demand. Services exports resumed a modest increase.

On the domestic front, private consumption expenditure picked up growth under the backdrop of the receding local epidemic and improving labour market conditions. Overall investment expenditure saw accelerated growth amid improved business sentiment and a low comparison base.

Looking ahead, the Government expects that the global economic recovery should continue to support the city’s goods exports in the near term, though there may be some moderation due to the exceptionally strong performance in the first half of 2021.

Exports of services should likewise sustain growth, the Government said. Nevertheless, the spread of more infectious COVID-19 variants in many places of the world will cast uncertainty over the global economic outlook. Other risk factors like China-US relations, geopolitical tensions and major central banks’ evolving monetary policy stance also warrant attention.

Locally, the stabilised epidemic situation and the Consumption Voucher Scheme will help stimulate consumer sentiment and lend support to consumption-related sectors, the Government added.

The revised GDP figures for the second quarter will be released on August 13.