Hong Kong's Gross Domestic Product rose 6.5% in the second quarter, following an 8% rise in the first quarter, marking the second quarter of above-trend growth.

Financial Secretary John Tsang said today that on a seasonally adjusted quarter-to-quarter comparison, GDP grew 1.4% in the second quarter.

Robust growth: Financial Secretary John Tsang says Hong Kong's GDP rose 6.5% in the second quarter.

Exports up

Total exports  remained strong in the sustained global economic recovery. Total exports rose 20.1% in real terms over a year earlier. The Asian markets still outperformed other markets by a wide margin.

Total exports to the Mainland showed a double-digit year-on-year growth, even against a higher base of comparison in the second quarter. Exports to Taiwan, Japan, Korea and Singapore all had double-digit growth of 15% to 30%.

Services exports grew 16.9% over a year earlier. Inbound tourism continued to benefit from the increase in Mainland visitors and the recovery in regional markets. 

On a seasonally adjusted quarter-to-quarter basis, exports of services grew 0.8% in real terms in the second quarter.

Domestic demand was resilient, with private consumption spending up 4.6% year-on-year in real terms due to general improvement in the overall economic situation and incomes.

Investment spending rose 15.2%. Further growth in public-sector works boosted construction activity, while machinery and equipment acquisition also maintained strong momentum.

Labour market

The underemployment situation improved, although the seasonally adjusted unemployment rate rose slightly, to 4.6% in the second quarter. 

Inflationary pressure rose in the second quarter, as underlying consumer price inflation climbed to 1.5%. The forecast rate of the headline consumer price inflation remained unchanged at 2.3%. 

Overall flat prices went up 1.5% after a rise of 6.5% in the first quarter of 2010. Transactions in the second quarter fell 2.6% over the previous quarter.

The global economy remained on track to recovery in the second quarter. However, the outlook for the external environment has become more uncertain as the sovereign debt problem in Europe, leading many European economies to introduce austerity measures, posed downside risks. 

Given the growth momentum in the United States has weakened, Hong Kong's year-on-year export growth may experience some moderation in the second half of the year.