May 11, 2012

Gross Domestic Product grew 0.4% year-on-year in the first quarter, after a 3% expansion in the fourth quarter.
 
Government Economist Helen Chan announced the figures today, saying they indicate Hong Kong's economy slowed further.
 
She said the weak performance was mainly due to a lull in exports amid a difficult external environment, however, the domestic sector continued to display strength and helped cushion overall economic performance.
 
Total exports of goods dipped by 5.7% over a year earlier, while total exports of services grew by 3.6% thanks to thriving inbound tourism.
 
On the domestic front, private consumption expenditure rose 5.6% due to improved income conditions. Investment spending also increased 12.2%, buttressed by active machinery and equipment acquisition, and public sector infrastructure works.  
 
The downside risks in the external environment remain notable, she said, due mainly to the lingering eurozone sovereign debt crisis. The stable Mainland economy and improved US economy will provide some support to Hong Kong’s exports, she said, adding forecast GDP growth remains at 1% to 3% for 2012 as a whole.
 
The forecast rates of headline and underlying consumer price inflation for the year remain at 3.5% and 4%.