HK's Quarterly Growth Slows To 5.4 Percent

Hong Kong's GDP growth reached 5.4 percent year-on-year for the third quarter, down from a 7.6 percent expansion in the previous quarter.

New economic data released on Monday also showed that private consumption expenditure rose seven percent over a year ago in the quarter ended September, edging down from the 7.2 percent growth recorded in the second quarter.

The government said the slower growth was partially explained by the base effect and faster-than-expected growth in the first half of this year.

On a quarter-to-quarter comparison, Hong Kong's third quarter GDP inched up 0.1 percent from the second quarter.

"Consumer spending has been rather resilient even though there's a slight deceleration, part of the reason is also because of the roll-out of the government spending voucher," said Gary Ng, Asia Pacific economist at Natixis.

Ng forecast the local economy to log year-on-year growth of above six percent this year.

He said the upcoming months will be crucial for the local economy and the government must find the right balance in its border reopening and Covid strategy.

"It is indeed a struggle that the government may need to decide because right now I think the priority is focused on restricting a lot of measures trying to open with mainland China but also every strategy also has a downside," he explained.

"It may actually deter or make it more difficult for some of the other travellers probably if they want to do business in Hong Kong or some of the multinational firms, they may decide not to put their staff in Hong Kong."

The government said solid growth in domestic and external demand continued to support the local economic recovery.

But it warned that the spread of mutant Covid strains and supply bottlenecks could threaten the global recovery, adding that rising energy prices and inflation pressures in the US and Europe also added to uncertainties.