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Statistics on Hong Kong's Gross National Product (GNP) and External Factor Income Flows (EFIF) for the fourth quarter of 2006 are released today (March 15) by the Census and Statistics Department (C&SD).
In the fourth quarter of 2006, Hong Kong's GNP increased by 9.7% over a year earlier to $402.4 billion at current market prices. The Gross Domestic Product (GDP), estimated at $397.9 billion at current market prices in the same quarter, recorded a 6.5% increase during the period. Compared with GDP, the value of Hong Kongˇ¦s GNP was larger by $4.4 billion in the fourth quarter of 2006, representing a net external factor income inflow of the same amount, and equivalent to 1.1% of GDP in that quarter.
After netting out the effect of price changes, Hong Kong's GNP increased by 10.0% in real terms in the fourth quarter of 2006 over a year earlier. This was higher than the corresponding increase of 7.0% recorded for GDP in the same quarter.
Total factor income inflow into Hong Kong, estimated at $171.8 billion in the fourth quarter of 2006 and equivalent to 43.2% of GDP in that quarter, increased markedly by 26.4% over a year earlier. At the same time, total factor income outflow, estimated at $167.4 billion in the fourth quarter of 2006 and equivalent to 42.1% of GDP of the same period, also recorded an increase of 17.4% over a year earlier. Taking the inflow and outflow together, a net external factor income inflow of $4.4 billion was recorded in the fourth quarter of 2006.
Within total factor income inflow, Direct Investment Income (DII) increased by 18.7% over a year earlier, mainly due to increased earnings of some prominent local enterprises from investment abroad. Portfolio Investment Income (PII) rose considerably by 32.7%, mainly attributable to increase in interest income from holding of non-resident debt securities during the period. Other Investment Income (OII) surged by 41.5% over a year earlier, mainly on account of increased interest income from offshore loans and deposits of the local banking sector, which in turn was the combined result of increases in interest rates and external assets of the local banking sector.
Within total factor income outflow, DII increased by 12.6% over a year earlier, largely attributable to increased earnings of some prominent multinational enterprises from investment in Hong Kong during the period. PII increased substantially by 46.9%, mainly due to increased dividend pay-out by a number of resident publicly listed companies. OII increased significantly by 31.3%, largely caused by increased liabilities of the local banking sector and higher interest rates.
Analysed by country/territory, the mainland of China continued to be the largest source of Hong Kong's external factor income inflow in the fourth quarter of 2006, accounting for 26.8%. This was followed by the British Virgin Islands, with a share of 22.8%, reflecting continued investment income inflow from this tax haven economy where Hong Kong companies had set up a considerable number of holding companies. Other major source countries/territories were the United States of America and the United Kingdom, at 10.4% and 6.9% respectively.
The mainland of China and the British Virgin Islands were also the most important destinations for Hong Kong's external factor income outflow in the fourth quarter of 2006, accounting for 23.4% and 21.0% respectively. Other major destination countries/territories included the United States of America, at 9.3%, and the Netherlands, at 8.2%.
For 2006 as a whole, Hong Kong's GNP increased by 6.7% over a year earlier to $1,477.4 billion at current market prices. The difference of $5.1 billion from GDP for the same year (estimated at $1,472.3 billion) represented a net factor income inflow of the same amount and equivalent to 0.3% of GDP in the year. After netting out the effect of price changes, Hong Kong's GNP increased by 7.1% in real terms in 2006 over 2005. The total factor income inflow was estimated at $643.1 billion, or 43.7% of GDP in 2006 while the corresponding outflow at $638.0 billion, or 43.3% of GDP.
Further Information
GDP and GNP are closely related measures of economic performance. GDP is the total value of production of all resident producing units within the territory. GNP denotes the total income earned by residents of a particular territory, regardless of the place in which the economic activities generating the income are undertaken. In other words, GNP is obtained by adding to GDP factor income earned by residents from outside the territory and deducting factor income earned by non-residents within the territory.
The above EFIF figures are compiled based on data obtained from the Survey of External Claims, Liabilities and Income, supplemented by data from other sources.
Figures of GNP and EFIF from the first quarter of 2005 to the fourth quarter of 2006 analysed by income component are presented in Table A, while the country/territory breakdowns of external factor income inflows and external factor income outflows for the same period are presented in Tables B(1) and B(2) respectively.
Statistics on GNP and EFIF for 2006 are preliminary figures. They are subject to revision when more data become available.
Enquiries about GNP and EFIF statistics may be directed to the Balance of Payments Branch (2) of the C&SD at 2116 5102.
Ends/Thursday, March 15, 2007
Issued at HKT 16:15
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