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Hong Kong's economy expanded more than expected in the third quarter and the government raised its full-year growth forecast, citing robust exports, consumer spending and capital investment.
Gross domestic product (GDP) rose a seasonally adjusted 2.7 percent from the second quarter, when it gained a revised 3.4 percent, the government said in a statement last Friday. From the same period in 2004, the economy expanded 8.2 percent, the fastest in more than a year. None of the 17 economists in a survey predicted such rapid growth.
Hong Kong is benefiting from surging trade and tourism from the mainland.
Seeking gains from visitors, Walt Disney Co. opened a HK$3.5 billion theme park, Mandarin Oriental International Ltd. and Four Seasons Hotels Inc. opened new hotels and Harvey Nichols Group Plc opened a department store in the city during the quarter.
"Hong Kong people feel the future is much brighter and they're willing to increase consumption despite higher interest rates," said George Leung, an economist at HSBC Holdings Plc, Hong Kong's largest lender. "People have become more and more convinced the Hong Kong economy will have a long-term uptrend and they don't have to save as much for the future."
Private consumption increased a seasonally adjusted 2.2 percent in the third quarter from the previous three months, after gaining 0.4 percent in the second quarter.
The city's exports, the bulk of which are bound for or originate on the mainland, reached a record in September and the jobless rate fell to a four-year low last month.
The government said the economy expanded 7.3 percent in the first nine months and raised its full-year growth forecast to 7 percent from a maximum 5.5 percent previously.
"The stronger-than-expected expansion was characterized by continued surge in exports of goods and services, re-acceleration in consumer spending growth, and sustained notable growth in machinery and equipment investment," Hong Kong government economist K C Kwok said in the statement.
Allowing for inflation, merchandise exports rose 12.8 percent from a year earlier in the third quarter, services exports were up 8.2 percent and consumer spending gained 4.6 percent, the report showed. Investment in plant and machinery surged 8.1 percent and overall investment rose 2.4 percent.
Independent economists expected GDP to rise 1.4 percent from the second quarter and 6 percent from a year earlier. The most optimistic earlier projections were for respective growth rates of 2.1 percent and 7.7 percent respectively.
(Shenzhen Daily November 28, 2005)
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