Hong Kong’s economic growth exceeded forecasts in the second quarter, driven by rising exports and leading to an upward revision in its full-year growth expectations.
Official figures show the economy accelerated 1 per cent in the second quarter of the year compared to the same period in 2016, up from a quarterly pace of 0.7 per cent at the start of 2017. Analysts had expected a slight slowdown to 0.6 per cent in the three months to June.
On a year on year measure, GDP rose 3.8 per cent – above a 3.3 per cent forecast – and a moderation from the 4.3 per cent year on year registered at the start of the year. The first quarter expansion was Hong Kong’s best since 2011.
The robust quarterly performance prompted Hong Kong’s statistics office to revise its full-year GDP forecast from a range of 2-3 per cent to 3-4 per cent in 2017.
The latest export data shows that exports climbed 5.6 per cent in the second quarter – down from 9.3 per cent in the previous quarter but still the the second highest rate of growth since 2013.
Chang Liu, China economist at Capital Economics, expects the economy to slow down in the coming quarters after a blistering first half:
While buoyant external demand is likely to keep export growth relatively strong, growth in investment should fall in the second half of this year as base effects turn less favourable.
With growth holding up, data released last month showed unemployment in Hong Kong fell to 3.1 per cent, the lowest level in three years.