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Hong Kong's economy continued to show a strong growth momentum at the start of 2005, with the gross domestic product (GDP) rising by six percent in real terms in the first quarter, following 8.1 percent growth in 2004.
Announcing Hong Kong's economic situation in the first quarter Friday, economist Kwok Kwok-chuen said given the robust outturn in the first quarter, the forecast GDP growth for 2005 is unchanged at 4.5 percent to 5.5 percent in real terms, same as the forecast released in the budget in March.
According to the Hong Kong Special Administrative Region government economist, on a seasonally adjusted quarter-to-quarter comparison, GDP expanded for the seventh straight quarter, by 1.5 percent in real terms in the first quarter of 2005.
Externally, goods exports held up well for the first quarter as a whole, rising 8.9 percent in real terms over a year earlier. This was supported by the Chinese mainland's strong trade flows and enhanced price competitiveness from the earlier weakness of the US dollar.
Services exports grew 8.6 percent in the first quarter as offshore trade continued to surge, while inbound tourism was buoyant.
On the domestic front, consumption demand held firm along with the more entrenched economic recovery, improving labor market conditions and a strong property market. Private consumption spending went up 4.6 percent in real terms.
Investment demand recovered after a temporary relapse in the fourth quarter of 2004, underscored by a promising business outlook. Overall investment spending reverted to a 2.2 percent increase in real terms in the first quarter, having temporarily suffered a 1.4 percent drop in the fourth quarter last year.
The labor market improved along with the economic upturn, with total employment rising to an all-time high in the first quarter of 2005. The seasonally adjusted unemployment rate fell to 6.1 percent in the first quarter and further to a 41-month low of 5.9 percent in the three months ending in April 2005.
While the economy performed well in the first quarter, the trade outlook is increasingly overshadowed by a number of risks in the external environment, Kwok said.
Apart from the sustained high crude oil prices, signs of a regional slow-down have become more evident, leading to a general moderation in the import intake.
And if the US dollar continues to strengthen, Hong Kong's export competitiveness would weaken.
Lately, the United States has taken steps to institute safeguard measures against seven categories of textile imports from the Chinese mainland, and there is a risk the European Union will do the same. These factors have added uncertainties to Hong Kong's trade outlook. Compared with two months ago, the trade prospect has dimmed somewhat.
(Xinhua News Agency May 28, 2005)
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