Hong Kong's economic performance in the third quarter beats expectations

Financial News

Written by: Wei Yingzhi

2020-10-30 18:34

Last update date: 2020-10-30 18:34

The economic situation of Hong Kong is gradually improving.

The government just announced the third quarter economic data.

Although it still recorded a contraction of 3.4% year-on-year, it was significantly narrower than the 9% decline in the second quarter, and experienced a 3% quarter-to-quarter growth, ending five consecutive quarters of technical recession.

The better-than-expected economic performance in the last quarter was not only a lower base than the same period last year, but also related to the gradual relaxation of the new crown pneumonia epidemic in Hong Kong.

Although the economic prospects of Hong Kong are beginning to dawn, economists have pointed out that factors such as travel restrictions have brought uncertainty to the Hong Kong economy.

Standard Chartered Liu Jian's Hang Seng Index's economic performance last quarter beat expectations

Regarding the economic prospects of Hong Kong, Liu Jianheng, a senior economist for Standard Chartered Greater China, said that the government has just released preliminary estimates that the third quarter of Hong Kong’s GDP fell by 3.4% year-on-year in real terms, which is better than market expectations, with a 3% growth quarter-to-quarter , Which shows that Hong Kong has ended five consecutive quarters of technical decline.

The economic data in the third quarter has improved, mainly due to the low base in the same period last year (the economy recorded a 2.8% year-on-year contraction in the third quarter of 2019) and the gradual exit of the third wave of the new crown pneumonia epidemic in September. Market sentiment Slightly better.

The bank expects that the continued economic recovery in Mainland China and the slack attitude of the US Federal Reserve will help Hong Kong improve its economic situation.

However, large-scale tourism restrictions, severe external economic environment and severe impact on the local labor market continue to bring uncertainties to the Hong Kong economy.

Zhuang Tailiang estimated that affected by the economic recovery in Mainland China, the situation in Hong Kong in the fourth quarter of the coming year will continue to rebound.

(Photo by Gong Jiasheng)

Zhuang Tailiang expects the economy to rebound in the fourth quarter

Associate Professor Zhuang Tailiang of the Department of Economics of the Chinese University of Hong Kong said that Hong Kong’s economy has actually bottomed out. In September, trade volume rose sharply, and re-export trade returned to normal. The figures showed better than before the epidemic. It has been falling in mid-2018. Fell by more than 10%.

Zhuang Tailiang emphasized that because trade and logistics account for 20% of Hong Kong's economy, the number of re-export trade is very important, "something more than 2% is already very beneficial to the economy."

In terms of finance, thanks to the driving force of the mainland market, the figures show that the industry is still healthy. In addition, finance accounts for 40% of Hong Kong’s economy, which is the same as trade. Therefore, if this 40% of the economy grows steadily, Hong Kong’s economy will grow. Continued growth.

Since the unemployment rate is mainly concentrated in some smaller, less-income industries, such as the catering industry, the data will show that the unemployment rate is still high, but the economy will have begun to rebound, because related industries have little impact on Hong Kong's overall economy.

Therefore, Zhuang Tailiang estimated that the situation in Hong Kong in the fourth quarter of the coming year will continue to rebound due to the economic recovery in Mainland China.

When asked how Hong Kong is subject to the tensions between China and the United States and how to deal with it, Mr. Zhuang pointed out that Hong Kong is in a more passive role and can choose to integrate with the Greater Bay Area and try to offset the US's influence on Hong Kong.

Hong Kong Economy