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The Census and Statistics Department (C&SD) released today (March 23) the preliminary Balance of Payments (BoP) accounts and External Debt (ED) statistics for the fourth quarter of 2008 and the whole year of 2008.
I. Balance of Payments Account
A BoP account is an integrated statistical statement of an economy・s external transactions with the rest of the world. The BoP account released here contains detailed breakdowns for both the current account and the capital and financial account.
Overall Situation
Hong Kong recorded a surplus amounting to $147.3 billion in its BoP account (at 33.8% of GDP) in the fourth quarter of 2008, as compared with a surplus of $51.3 billion (at 11.9% of GDP) in the third quarter of 2008. Reserve assets correspondingly increased by the same amount in the fourth quarter of 2008.
Of the major BoP components, there was a current account surplus of $80.5 billion (at 18.5% of GDP) in the fourth quarter of 2008, larger than that of $75.3 billion (at 17.5% of GDP) in the third quarter of 2008. At the same time, a net inflow of financial non-reserve assets amounting to $73.9 billion (at 16.9% of GDP) was recorded in the fourth quarter of 2008, as against a net outflow of $49.2 billion (at 11.4% of GDP) in the third quarter of 2008.
For 2008 as a whole, there was a BoP surplus of $263.9 billion (at 15.7% of GDP), as compared with a surplus of $114.5 billion (at 7.1% of GDP) in 2007.
Of the major BoP components, Hong Kong recorded a current account surplus of $238.4 billion (at 14.2% of GDP) in 2008, larger than that of $199.2 billion (at 12.3% of GDP) in 2007. At the same time, a net inflow of financial non-reserve assets amounting to $31.1 billion (at 1.9% of GDP) was recorded in 2008, as against a net outflow of $155.1 billion (at 9.6% of GDP) in 2007.
Current Account
The current account recorded a surplus of $80.5 billion in the fourth quarter of 2008, larger than that of $47.7 billion in the fourth quarter of 2007. Compared with the same quarter in 2007, the current account surplus in the fourth quarter of 2008 was characterised by a decrease in visible trade deficit, an increase in invisible trade surplus, an increase in net inflow of external factor income, and a continued net outflow of current transfers.
With imports of goods decreasing faster than exports of goods, the visible trade deficit decreased to $30.6 billion in the fourth quarter of 2008, from $45.9 billion in the same quarter in 2007. The invisible trade surplus increased to $99.7 billion in the fourth quarter of 2008, from $95.8 billion in the same quarter in 2007, with an increase in exports of services and a decrease in imports of services. Overall, a combined visible and invisible trade surplus of $69.1 billion was recorded in the fourth quarter of 2008, larger than that of $49.9 billion in the same quarter in 2007.
On factor income flows, external factor income inflow and outflow amounted to $207.5 billion and $190.3 billion respectively in the fourth quarter of 2008, thus yielding a net inflow of $17.2 billion in the fourth quarter of 2008, as compared with a net inflow of $2.6 billion in the same quarter in 2007.
A current transfer outflow of $7.5 billion and an inflow of $1.8 billion were recorded in the fourth quarter of 2008, resulting in a net outflow of $5.7 billion in that quarter, larger than that of $4.9 billion in the same quarter in 2007.
Comparing the fourth quarter of 2008 with the third quarter of 2008, and bearing in mind that this comparison for the main current account components may be affected by seasonal factors, the visible trade deficit decreased from $41.4 billion to $30.6 billion, while the invisible trade surplus rose from $98.7 billion to $99.7 billion. Concurrently, the net inflow of external factor income decreased from $24.3 billion to $17.2 billion, while the net outflow of current transfers decreased from $6.3 billion to $5.7 billion.
For 2008 as a whole, the current account surplus was $238.4 billion, larger than that of $199.2 billion in 2007. This was the combined result of an increase in visible trade deficit from $153.7 billion to $180.1 billion, an increase in invisible trade surplus from $328.5 billion to $362.6 billion, an increase in net inflow of external factor income from $44.4 billion to $81.4 billion, and an increase in net outflow of current transfers from $20.1 billion to $25.5 billion.
Capital and Financial Account
In the fourth quarter of 2008, a net inflow of capital transfers was estimated at $4.3 billion, as compared with a net inflow of $8.1 billion in the third quarter of 2008.
An overall net inflow of financial non-reserve assets amounting to $73.9 billion was recorded in the fourth quarter of 2008, as against a net outflow of $49.2 billion in the third quarter of 2008. The overall net inflow of financial non-reserve assets in the fourth quarter of 2008 was the combined result of a net inflow of direct investment, a net outflow of portfolio investment, a net inflow due to cash settlement of financial derivatives, and a net inflow of other investment.
On direct investment (DI) flows, Hong Kong・s DI abroad increased by $120.3 billion and foreign DI in Hong Kong rose by $135.8 billion during the fourth quarter of 2008, resulting in a net DI inflow of $15.5 billion, as compared with a net inflow of $32.4 billion in the third quarter of 2008.
On portfolio investment (PI) flows, assets increased by $160.5 billion and liabilities decreased by $49.6 billion in the fourth quarter of 2008. Taken together, there was a net PI outflow amounting to $210.1 billion in the fourth quarter of 2008, as against a net inflow of $80.9 billion in the third quarter of 2008. The increase in PI assets was mainly due to increased holdings of non-resident short-term debt securities by Hong Kong residents. On the other hand, the decrease in PI liabilities was attributable to reduced holdings of resident equity securities and debt securities by non-residents.
On financial derivatives (FD) flows, a net inflow of $8.5 billion due to cash settlement of FD was recorded in the fourth quarter of 2008, as compared with a net inflow of $32.8 billion in the third quarter of 2008.
On other investment (OI) flows, assets decreased by $384.3 billion and liabilities decreased by $124.2 billion during the fourth quarter of 2008. Taken together, there was a net OI inflow of $260.1 billion in the fourth quarter of 2008, as against a net outflow of $195.3 billion in the third quarter of 2008. The reduction of OI assets was mainly due to a decrease in currency and deposit assets. On the other hand, the decrease in OI liabilities was mainly due to reductions in currency and deposit liabilities and loan liabilities of other sectors.
Change in reserve assets in the BoP account reflects the net change in Hong Kong・s foreign currency reserve assets, which come under the management of the Hong Kong Monetary Authority (HKMA). In the fourth quarter of 2008, reserve assets increased by $147.3 billion, as compared with an increase of $51.3 billion in the third quarter of 2008. The accumulation in reserve assets was mainly due to purchases of foreign currencies with Hong Kong dollars and income from foreign currency assets during the quarter.
For 2008 as a whole, a net inflow of capital transfers was estimated at $16.9 billion, as compared with a net inflow of $10.3 billion in 2007.
For 2008 as a whole, an overall net inflow of financial non-reserve assets amounting to $31.1 billion was recorded, as against a net outflow of $155.1 billion in 2007. The overall net inflow of financial non-reserve assets in 2008 was the combined result of a net inflow of direct investment, a net outflow of portfolio investment, a net inflow due to cash settlement of financial derivatives, and a net inflow of other investment.
Both Hong Kong・s DI abroad and foreign DI in Hong Kong increased in 2008, by $466.6 billion and $490.5 billion respectively, resulting in a net DI inflow of $23.9 billion in 2008, as against a net DI outflow of $52.6 billion in 2007.
In 2008, PI assets increased by $149.9 billion and PI liabilities decreased by $142.5 billion. Taken together, there was a net PI outflow amounting to $292.5 billion in 2008, as compared with a net outflow of $21.5 billion in 2007. The increase in PI assets in 2008 was mainly due to increased holdings of non-resident equity securities and short-term debt securities by Hong Kong residents, while the decrease in PI liabilities was mainly attributable to decreased holdings of resident debt securities by non-residents.
A net inflow of $63.6 billion due to cash settlement of FD was recorded in 2008, as compared with a net inflow of $43.5 billion in 2007.
Both OI assets and OI liabilities decreased in 2008, by $458.5 billion and $222.4 billion respectively. This resulted in a net OI inflow of $236.1 billion in 2008, as against a net outflow of $124.6 billion in 2007. The decrease in OI assets was mainly due to a decrease in currency and deposit assets, while the decrease in OI liabilities was mainly attributable to a decrease in loan liabilities of other sectors.
In 2008, reserve assets increased by $263.9 billion, as compared with an accumulation of $114.5 billion in 2007.
Table 1 gives the BoP account by standard component. Table 2 gives the detailed current account analysed by sub-account component, while Table 3 gives the detailed capital and financial account analysed by sub-account component.
II. External Debt Statistics
Gross ED, at any point in time, is the outstanding amount of those actual current, and not contingent, liabilities that are owed to non-residents by residents of an economy and that require payment(s) of principal and/or interest by the debtor at some point(s) in time in the future.
According to this international definition, apart from borrowing from abroad, ED of Hong Kong can also arise through normal trading and banking businesses. For instance, a trade credit extended by an exporter of the United States to an importer in Hong Kong is part of Hong Kong・s ED. Likewise, deposits placed by non-residents in a bank in Hong Kong constitute ED of Hong Kong・s banking sector.
Overall Situation
At end-December 2008, Hong Kong・s gross ED, measuring total outstanding gross external liabilities other than equity liabilities, amounted to $5,115.1 billion (at 305% of GDP). Compared with end-September 2008, gross ED decreased by $148.5 billion. This was mainly attributable to the decreases in ED of other sectors, ED of the banking sector and ED of the HKMA, which were larger than the increases in DI debt liabilities (inter-company lending) and ED of the General Government.
Sectoral Analysis
At end-December 2008, a major proportion of Hong Kong・s ED was due to transactions of the banking sector, accounting for 72.3% of the total. Other ED consisted of debt liabilities to affiliated enterprises and direct investors under DI (with a share of 20.1%), ED of other sectors (7.3%), ED of the General Government (0.3%) and ED of the HKMA (0.1%).
ED of Hong Kong・s banking sector, as the largest component of Hong Kong・s ED, decreased from $3,766.5 billion at end-September 2008 (at 223% of GDP) to $3,700.1 billion at end-December 2008 (at 220% of GDP), of which 98.0% ($3,625.9 billion) was short-term liabilities. Among these short-term liabilities, 97.5% ($3,536.5 billion) were held in the form of currency and deposits. This was mainly attributable to inter-bank placements from non-resident banks.
DI debt liabilities (inter-company lending), constituting the second largest component of Hong Kong・s ED, amounted to $1,027.1 billion at end-December 2008. Within these, 79.3% ($814.8 billion) were debt liabilities to direct investors.
ED of other sectors amounted to $371.0 billion at end-December 2008, smaller than that of $447.5 billion at end-September 2008. Within this, 66.5% ($246.5 billion) was long-term liabilities, while the remaining 33.5% ($124.4 billion) was short-term liabilities. 75.8% ($187.0 billion) of the long-term liabilities were held in the form of loans, whereas 40.7% ($50.7 billion) of the short-term liabilities were trade credits.
ED of the General Government amounted to $13.1 billion at end-December 2008, all of which was long-term liabilities. This was attributable to non-residents・ holdings of debt securities issued by the HKSAR Government.
ED of the HKMA amounted to $3.9 billion at end-December 2008, smaller than that of $27.5 billion at end-September 2008. At end-December 2008, a major proportion of ED of the HKMA was the long-term liabilities of Exchange Fund Notes, which took up a share of 95.4% ($3.7 billion) of ED of the HKMA.
Table 4 gives the ED statistics by standard component.
Further information
For enquiries on the BoP and ED statistics, please call the Balance of Payments Section of the Census and Statistics Department (Tel.: 2116 8660).
The present BoP and ED statistics for the fourth quarter of 2008 and the whole year of 2008 are only preliminary, and are subject to revision upon the availability of more data.
In compiling and presenting the BoP account of Hong Kong, the international standards prescribed in the Fifth Edition of the Balance of Payments Manual of the International Monetary Fund (IMF) are adopted. As for ED statistics, the international standards prescribed in the External Debt Statistics: Guide for Compilers and Users published by the Inter-Agency Task Force on Finance Statistics chaired by the IMF are adopted. These are also in compliance with the Special Data Dissemination Standard of the IMF, to which Hong Kong has subscribed.
More details on the estimates of BoP and ED are published in the publication Balance of Payments Statistics of Hong Kong, Fourth quarter 2008. Users can download the publication free of charge at the website of the C&SD (www.censtatd.gov.hk/products_and_services/products/publications/statistical_report/national_income_and_bop/index.jsp). Print version of the publication is available for sale at HK$33 per issue. Purchase can be done in person at the Publications Unit of the C&SD (Address: 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025) or through mail order by returning a completed order form which can be downloaded from the C&SD・s website (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_publications/index.jsp). Print version of the publication is also available for sale online at the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).
Ends/Monday, March 23, 2009
Issued at HKT 16:31
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