Hong Kong economy shows 4% contraction in first quarter of 2022
Hong Kong’s economy contracted 4% on an annual basis in the first quarter, preliminary estimates showed on Tuesday, ending a streak of annual expansion over the previous four quarters amid weak demand both interior and exterior.
The city’s GDP fell 4% in real terms in the first quarter from a year earlier, compared to a 4.7% increase in the fourth quarter of 2021, according to the Region Government’s Census and Statistics Department. Hong Kong Special Administration (HKSAR). revealed.
On a seasonally adjusted basis, its GDP fell 2.9% in real terms in the first quarter compared to the previous quarter.
Private consumption spending fell 5.4% in real terms in the first quarter from a year earlier, compared with a 5.3% rise in the fourth quarter, according to a breakdown of the first quarterly data.
Government consumer spending in national accounts terms rose 5.9% year-on-year in the first quarter, following a 4.1% jump in the fourth quarter. Gross domestic fixed capital formation, for its part, plunged 8.3% year-on-year in the last quarter, after falling 0.6% in the fourth quarter.
The local economy came under immense pressure during the first quarter, the city’s statistics department said in a statement posted on its website, citing a government spokesperson.
“Externally, slowing global demand growth and outbreak-induced disruptions to cross-border transportation have significantly dampened exports. At the national level, a wide range of economic activities as well as economic sentiment have been hit hard by the fifth wave of the local epidemic and the resulting anti-epidemic measures.
The city’s merchandise exports, as measured by national accounts, fell 4.5% year-on-year in the first quarter, according to Tuesday’s announcement. By comparison, its goods exports rose 13.5% in the fourth quarter.
Hong Kong’s merchandise imports fell 5.9% in the last quarter, after rising 9.9% in the fourth quarter.
A similar about-face also rattled its services exports and imports in the first quarter, albeit at a slower pace.
Future headwinds facing the city’s economy include runaway inflation that has prompted major central banks to accelerate monetary policy tightening, the crisis in Ukraine that could keep global energy and raw materials at a high level, exacerbate supply chain disruptions and dampen economic sentiment, according to the Hong Kong SAR government’s statement on Tuesday.
He also took into account the evolution of the pandemic and the development of China-US relations.
On the bright side, as the statement points out, the city’s outbreak has been receding since early March, thanks to central government support and concerted community efforts. This has allowed Hong Kong to gradually ease social distancing measures, which come on top of various Hong Kong SAR support measures, aimed at supporting domestic demand for the rest of the year.
Revised GDP data, more detailed figures for the first quarter and the revised GDP estimate for the whole of 2022 will be due on May 13.