HK's GNP falls by 6.2 percent in second quarter

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Last updated at: (Beijing Time) Saturday, September 20, 2003

HK's GNP falls by 6.2 percent in second quarter

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Hong Kong's Gross National Product (GNP) in the second quarter of 2003 was estimated at 289.3billion HK dollars (37.08 billion US dollars) at current market prices, down by 6.2 percent from a year earlier, the government said.

According to a press release of the Census and Statistics Department of the Hong Kong Special Administrative Region (SAR), the SAR's Gross Domestic Product (GDP) was estimated at 287.8 billion HK dollars (36.89 billion US dollars) at current market prices for the quarter, recording a broadly similar decrease, by 6.0 percent.

Netting out the effect of price changes, Hong Kong's GNP decreased by 0.6 percent in real terms in the second quarter of 2003 from a year ago, as compared to a 0.5 percent drop in real terms in GDP during the same period last year.

Total factor income inflow into Hong Kong, estimated at 75.7 billion HK dollars (9.7 billion US dollars) in the second quarter of 2003 and equivalent to 26.3 percent of GDP in the quarter, decreased by 3.0 percent from a year earlier.

Within the total factor income inflow, direct investment income(DII) inflow decreased slightly by 0.7 percent in the second quarter of 2003 from a year earlier, mainly due to decreased earnings of some prominent local enterprises from investment abroad.

However, the portfolio investment income (PII) inflow increasedby 10.4 percent, mainly attributable to increased dividend receipts from holding of non-resident equity securities during theperiod.

Analyzed by country/territory, the Chinese mainland continued to be the largest source of Hong Kong's external factor income inflow in the second quarter of 2003, accounting for 30.8 percent of the total inflow in the quarter.

A Government Secretariat spokesman noted that both external factor income inflow and outflow continued to decrease in the second quarter of 2003 over a year earlier, largely caused by further fall-off in interest income into and out of Hong Kong amidst a low interest rate environment globally.

As the decreases in overall external factor income inflow and outflow were of broadly comparable magnitude, the year-on-year decline in real terms in GNP in the second quarter of 2003 was broadly similar to that in GDP.

The spokesman further pointed out that both external factor income inflow and outflow remained sizable in the second quarter of 2003, each corresponding to more than 25 percent of Hong Kong'sGDP. This reflected the highly externally oriented nature of the SAR's economy as well as its position as an international financial center in facilitating external investment activities.

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