Real GDP Grows 7.9% In Q1

(To watch the full press conference with sign language interpretation, click here.)

The Hong Kong economy recovered visibly in the first quarter of 2021, with real gross domestic product (GDP) resuming appreciable year-on-year growth of 7.9%, ending six consecutive quarters of contraction.

Thanks to the global economic recovery led by the Mainland and the US alongside a sharp rebound in global demand, total exports of goods surged by 30.2% year-on-year in real terms.

However, the economic recovery was uneven and overall economic activity remained below the pre-recession level, as the COVID-19 pandemic continued to weigh on certain economic segments, particularly those involving consumer-facing activities.

The labour market was under notable pressure in the first quarter, though it stabilised in the latter part of the quarter as the epidemic receded. 

The seasonally adjusted unemployment rate went from a 17-year high of 7.2% in the three-month period ending February to 6.8% in the first quarter of 2021.

Consumption and investment demand revived somewhat but stayed relatively subdued.

Private consumption expenditure grew only modestly by 1.6% year-on-year in real terms even against an exceptionally low base of comparison.

Delivering the First Quarter Economic Report 2021 this afternoon, Government Economist Andrew Au said he expected domestic demand to further improve.

“Domestically, if the local epidemic remains well contained, business and consumer confidence, which has improved recently, should see some further improvement down the road.

“The Government’s relief measures, including the consumption voucher scheme, will help reinforce this development.”

Mr Au also appealed to the public to get vaccinated to help the economy recover.

“Many consumer-facing activities are labour intensive and are still affected by the threat of the epidemic. So it is essential for all of us to work together to keep the epidemic under control and actively participate in the vaccination programme.

“This will not only protect ourselves but also help create the necessary conditions for a full-fledged economic recovery.”

Considering that the economic recovery is uneven and the uncertainty associated with the pandemic is still high, the real GDP growth forecast of 3.5% to 5.5% for 2021 as announced in the Budget is maintained.

The actual outturn can hopefully be near the upper end of the range forecast if the pandemic situation improves in the period ahead, Mr Au added.