Hong Kong University expects local economy to grow by 1.8% in fourth quarter, but is expected to still record 0.6% contraction for the whole year

The Asia-Pacific Economic Cooperation Research Project of the Hong Kong Institute of Economics and Business Strategies of the University of Hong Kong has released high-frequency macroeconomic forecasts. Benefited from the second phase of the government consumption voucher program and the relaxation of social distancing measures, the real gross domestic product (GDP) is expected to recover in the third quarter of this year. Year-on-year growth of 0.7%.

The University of Hong Kong also pointed out that even though the new crown virus infection dropped sharply in the second half of the year, the uncertainty brought about by the global economic slowdown will limit the recent economic growth, of which foreign trade is the most affected, and the real GDP growth in the fourth quarter is expected to be 1.8%.

For the full year, however, the economy is still expected to contract by 0.6%.

The University of Hong Kong also predicts that in the fourth quarter of this year, Hong Kong's private consumption expenditure will increase by 1.7%, and the annual contraction is expected to be 0.6%; government consumption expenditure will increase by 5.3% in the fourth quarter and 7.3% in the whole year.

Exports and imports of goods fell by 13% and 11.6% respectively in the fourth quarter of this year, and by 9.8% and 9.3% respectively for the whole year.

Total investment increased by 2.2% in the fourth quarter of this year, of which investment in land and construction decreased by 1.3% and investment in machinery and equipment increased by 7.5% year-on-year.

The University of Hong Kong also expects that the composite consumer price index for this year will be 1.8% and the unemployment rate will be 4.4%.