Perspectives

My thanks to my colleague and friend Vivian Chiang, who composed an excellent summary today and brought this to my attention.

Based on the recent economic report released to the public by the Hong Kong government, it gives a bleak forecast for Hong Kong and it looks like we’re headed for a tough year ahead.

Here are some key points that I will highlight, based on my own readings of the entire report:

• GDP for the third quarter as a whole grew by 1.7 percent year-on-year, down further from 4.2 percent in the second quarter. This is largely contributed by the drop in global demand for the external sector and caused by a fall in domestic demand due to fears from the global financial crisis
• Merchandise exports is showing its worst performance since the first Q of 2002
• A slowdown in exports of financial services has affected Hong Kong’s service exports for the third quarter
• Consumption spending started to deteriorate in September, when the US financial turmoil escalated to a full-blown problem, causing the local stock market to plummet
• Investment spending shows modest growth in the third quarter, and companies are more cautious in making new investments and hiring new people
• Unemployment remains relatively low but rose a little to 3.4 percent in the third quarter
• Due to the financial turbulence that started in August last year stemmed from the US sub-prime mortage problem, it has caused many clogs across the board for financial markets around the world. The downturn is expected to be a prolonged problem
• Domestic demand is predicted to slow in Q4 with the stock market crash and businesses continue to be cautious in their operations

If you would like to see more figures, you may download the stats from the Census and Statistics Department directly.

Print versions are also available from the HK Government bookstore, and are for sale at HKD66 and HKD47 per issue.