HK GDP grows by 4 percent in 3rd quarter of 2003

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Last updated at: (Beijing Time) Friday, November 28, 2003

HK GDP grows by 4 percent in 3rd quarter of 2003

Hong Kong's gross domestic product (GDP) rose by 4 percent in real terms in the third quarter of 2003 over a year earlier, reversing the 0.5 percent decline in the second quarter.

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Hong Kong's gross domestic product (GDP) rose by 4 percent in real terms in the third quarter of 2003 over a year earlier, reversing the 0.5 percent decline in the second quarter.

This indicated that Hong Kong's economy had rebounded distinctly in the third quarter of 2003, from the setback caused by Severe Acute Respiratory Syndrome (SARS) in the second quarter, said Government Economist K Y Tang Friday.

The Government released Friday the Third Quarter Economic Report 2003, together with the preliminary figure on Gross Domestic Product for the third quarter of 2003.

On the strength of the prevailing upturn, the forecast growth rate in real terms of GDP for 2003 as a whole is revised to 3 percent, one percentage point up from that of 2 percent in the August round. This is the same as the ballpark updated forecast indicated by the Financial Secretary in his Statement to the Legislative Council on Oct. 22, Tang said.

On a seasonally adjusted quarter-to-quarter comparison, the turnaround in GDP was even more pronounced, with a 6.4 percent leap in real terms in the third quarter of 2003, as against a 3.7 percent dip in the second quarter.

He said the rebound was most conspicuous in the tourism-related sectors, driven by a sharp resurgence in visitor arrivals from the Chinese mainland, particularly so after the launch of the "individual visit" scheme for Chinese mainland visitors to Hong Kong in late July.

He said coupled with buoyant offshore trade, exports of services rose back by 6.9 percent in real terms in the third quarter of 2003 over a year earlier, representing a sharp turnaround from the 13.9 percent plunge in the second quarter.

Tang added that local consumer spending resumed increase for the first time in two years, upon better sentiment and improving labor market conditions. Private consumption expenditure rebounded to a 2 percent rise in real terms in the third quarter of 2003 over a year earlier, having fallen by 2.6 percent in the second quarter.

Statistics indicated that total exports of goods leaped by 9.8 percent in real terms in the third quarter of 2003 over a year earlier, albeit not as marked as the 14.3 percent surge in the second quarter due in part to shift to a higher base of comparison. Exports to both East Asia and the European Union sustained robust growth, more than offsetting the decline in exports to the United States.

Prompted by the recovery in economic activity, the seasonally adjusted unemployment rate fell from 8.6 percent in the second quarter of 2003 to 8.3 percent in the third quarter (and further to 8.0 percent in the three months ending October). Over the same period, the underemployment rate came down even more visibly, from4.3 percent to 3.6 percent (and further to 3.5 percent in the three months ending October).

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