Advance estimates on Gross Domestic Product for third quarter of 2022
***************************************************************
The Census and Statistics Department (C&SD) released today (October 31) the advance estimates on Gross Domestic Product (GDP) for the third quarter of 2022.
According to the advance estimates, GDP decreased by 4.5% in real terms in the third quarter of 2022 from a year earlier, compared with the decrease of 1.3% in the second quarter. The decline of GDP was mainly attributable to the weak performance in external demand during the quarter.
Analysed by major GDP component, private consumption expenditure remained virtually unchanged in real terms in the third quarter of 2022 over a year earlier, the same as that in the second quarter.
Government consumption expenditure measured in national accounts terms grew by 4.3% in real terms in the third quarter of 2022 over a year earlier, after the increase of 13.0% in the second quarter.
Gross domestic fixed capital formation decreased by 14.3% in real terms in the third quarter of 2022 from a year earlier, larger than the decline of 2.1% in the second quarter.
Over the same period, total exports of goods measured in national accounts terms recorded a decline of 15.5% in real terms from a year earlier, deteriorating from the 8.4% decrease in the second quarter. Imports of goods measured in national accounts terms fell by 16.0% in real terms in the third quarter of 2022, after the decrease of 5.9% in the second quarter.
Exports of services fell by 3.5% in real terms in the third quarter of 2022 from a year earlier, as against the increase of 2.2% in the second quarter. Imports of services decreased by 4.0% in real terms in the third quarter of 2022, compared with the 2.4% decrease in the second quarter.
On a seasonally adjusted quarter-to-quarter comparison basis, GDP decreased by 2.6% in real terms in the third quarter of 2022 when compared with the second quarter.
Commentary
A Government spokesman said that the Hong Kong economy showed a widened year-on-year contraction in the third quarter of 2022. The worsened external environment and continued disruptions to cross-boundary land cargo flows dealt a serious blow to Hong Kong's exports. Tightened financial conditions resulting from the aggressive interest rate hikes by the major central banks weighed heavily on domestic demand, though improved labour market conditions and the disbursement of consumption vouchers in August have rendered support to private consumption. According to the advance estimates, real GDP fell by 4.5% in the third quarter of 2022 from a year earlier, after decreasing by 1.3% in the previous quarter. On a seasonally adjusted quarter-to-quarter basis, real GDP fell by 2.6%, having increased by 1.0% in the preceding quarter.
Analysed by major expenditure component, private consumption expenditure showed little change from the same quarter last year, but continued to expand from the preceding quarter on a seasonally adjusted basis. Overall investment expenditure saw a widened fall from a year earlier. Total exports of goods plummeted and exports of services turned to a decline.
Looking ahead, the markedly deteriorating external environment will continue to pose immense pressure on Hong Kong's export performance in the remainder of the year. Elevated inflation and aggressive monetary policy tightening in major advanced economies will dampen global demand further. Heightened geopolitical tensions and the development of the pandemic will also add downside risks. Nonetheless, the recent relaxation of the quarantine and testing arrangements for inbound visitors should help exports of services.
Domestically, while the generally stable epidemic situation, improved labour market conditions and the Consumption Voucher Scheme will continue to support consumption demand, tightened financial conditions and the consequential weak asset prices will increasingly offset the positive effects. Rising borrowing costs will further dampen fixed asset investment.
The revised figures on GDP and more detailed statistics for the third quarter of 2022, as well as the revised GDP forecast for 2022, will be released on November 11, 2022.
Further information
The year-on-year percentage changes of GDP and selected major expenditure components in real terms from the third quarter of 2021 to the third quarter of 2022 are shown in Table 1.
When more data become available, the C&SD will compile revised figures on GDP. The revised figures on GDP and more detailed statistics for the third quarter of 2022 will be released at the C&SD website (www.censtatd.gov.hk/en/scode250.html) and the Gross Domestic Product (Quarterly) Report (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1030001&scode=250) on November 11, 2022.
For enquiries about statistics on GDP by expenditure component, please contact the National Income Branch (1) of the C&SD (Tel: 2582 5077 or email: gdp-e@censtatd.gov.hk).
Ends/Monday, October 31, 2022
Issued at HKT 16:30
NNNN