The economy of Hong Kong is likely to expand 1% to 2% as envisaged in the territory’s 2016-2017 budget, with the government describing the year ahead as a challenging one brought about by a struggling external economic environment.
Data released also show that Hong Kong’s gross domestic product (GDP) grew 2.4% in 2015.
Financial Secretary John Tsang stated recently the range of forecast for this year is one percentage point while last year’s range was two, said a news report by the Information Services Department.
He said the wider range of 1% to 3% last year was due to the expectation of a wider fluctuation in the economy.
Tsang noted that Hong Kong, being an externally oriented economy, is vulnerable to economic developments overseas, as highlighted by the fact that the city’s external trade amounts to four times the GDP.
Factors like possible changes in the U.S. economy, recessions in Europe, and problems besetting newly developing markets may have an impact on the state’s trade performance.
Tsang added that the global economy has yet to normalize in the wake of the 2008 financial crisis, and that Hong Kong’s economy has been supported by domestic demand in the past few years.
Goods exports decline
Meanwhile, Hong Kong’s total exports in January fell in value 3.8% year-on-year, while the value of imports dropped 9%, the Census & Statistics Department said.
Total goods exports fell to HKD299.9 billion (US$38.6 billion) from a year earlier, after a year-on-year decrease of 1.1% in December.
Within this total, the value of re-exports decreased 3.6% to HKD296.4 billion, while domestic exports decreased 23.4% to HKD3.4 billion. The value of goods imports fell 9% to HKD317.4 billion, after a year-on-year decrease of 4.6% in December.
A visible trade deficit of HKD17.5 billion, equivalent to 5.5% of goods imports value, was recorded in January.
Comparing the three-month period ending January with the preceding three months on a seasonally adjusted basis, the value of total goods exports increased 1%. Within this total, the value of re-exports increased 1%, while that of domestic exports fell 2%. The value of goods imports increased 0.9%.
Photo: WiNG
