Hong Kong – 2Q GDP
10/08/2018 05:23 pm MYT
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In 2Q 2018, Hong Kong’s real GDP grew by 3.5% on a year-on-year basis, a slower pace compared with the growth rate in 1Q 2018 – see figure 1. Government consumption grew at a faster pace, while private consumption reported a slower growth rate – see table 1.

The exports and imports of goods expanded 4.6% and 6.3% respectively from a year ago. Meanwhile, the exports of services recorded a year-on-year growth of 6.1%, lower than that of the preceding quarter (7.9%).

In the near term, Hong Kong is expected to continue to benefit from the strong global economy and economic performance in mainland China. Domestic demand should also stay resilient due to favourable labour market conditions. However, the US-China trade war and US interest rate normalisation pose downside risks to the Hong Kong economy.

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Note from Publisher
The much-awaited talk between president Xi Jinping and Donald Trump at the G-20 Summit in Buenos Aires ended with a tariff truce between the two economic giants. The US stock markets rallied in response. However, the rally was short-lived when the markets realised that there are still many uncertainties in the trade conflict between the two countries. In addition, a section of the US yield curve became inverted for the first time in more than a decade, signaling a potential recession in the US economy.

i Capital has advised subscribers since last year to watch the US yield curve carefully and it has also asked a number times whether the US economy is about to enter into a recession. Although chairman Powell has caved in to Trump’s crude bullying, the threat of the US yield curve fully inverting and a 2019 US recession has not subsided.

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