Hong Kong Economy Grows Most Since 2010

Ending a long and severe long recession, Hong Kong’s economy grew at the fastest pace in more than a decade in the first quarter of 2021, underpinned by robust exports, advance estimate from the Census and Statistics Department showed on Monday.

GDP grew 7.8 percent from a year earlier, in contrast to the decrease of 2.8 percent in the fourth quarter. This was the first growth since the second quarter of 2019 and the biggest expansion since the first quarter of 2010.

The government forecast the economy to grow in the range of 3.5 percent to 5.5 percent this year.

Quarter-to-quarter, GDP increased 5.3 percent versus a 0.5 percent rise in the preceding quarter.

The economic recovery was uneven and overall economic activity was still below the pre-recession level, as the pandemic and social distancing requirements continued to weigh on certain economic segments, a government spokesman said.

Looking ahead, the global economic recovery led by the Mainland and the US should bode well for Hong Kong’s exports of goods in the near term, spokesman added.

With the virus situation under control, the recovery is likely to continue to gain momentum over the coming quarters, Sheana Yue, an economist at Capital Economics, said.

The expenditure-side breakdown showed that private consumption climbed 1.6 percent versus a 6.9 percent decline in the fourth quarter. Likewise, government spending rose 6.7 percent.

The growth in gross domestic fixed capital formation rose to 4.5 percent from 3.6 percent in the prior quarter.

Exports of goods gained 30.6 percent on year, while shipments of services fell 8.7 percent. At the same time, imports of goods rose 23.3 percent, and that of services slid 14.9 percent.

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