Economy contracts 3.4% in Q3

October 30, 2020

Hong Kong’s economy in the third quarter of 2020 contracted 3.4% over a year earlier, much lower than the 9% decrease in the second quarter, the Government announced today.


According to the advance estimates on gross domestic product (GDP) for the third quarter released today, on a seasonally adjusted quarter-to-quarter comparison, GDP rose notably by 3% in the quarter, ending five consecutive quarters of contraction.


Private consumption expenditure decreased 7.7% in real terms in the third quarter, while government consumption expenditure grew 6.4%.


Gross domestic fixed capital formation dropped 11.2%, compared with the decrease of 21.4% in the second quarter.


Over the same period, total goods exports increased 3.8% and goods imports also grew by 1.9%.


Exports of services fell by 34.8% and imports of services decreased 37.8%.


The Government said overall economic performance saw some improvement in the third quarter, having hit bottom in the second quarter.


This was attributable to an improved external environment led by the solid expansion of the Mainland economy, some revival in sentiment in the latter part of the quarter amid the stabilisation of the local epidemic situation and stronger financial market activity, it added.


However, the level of economic activity was still notably below the level before the recession.


Looking ahead, the continued solid recovery of the Mainland economy should render support to Hong Kong's exports in the coming few months, while global demand and trade flows will further improve if the recovery of the major advanced economies sustains.


Barring any sharp resurgence of local COVID-19 infections, domestic economic activities should continue to recover in the rest of the year. That said, COVID-19 will remain a major downside risk to the global and local economy until effective vaccines are widely available.


The revised GDP figures for the third quarter will be released on November 13.

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