************************************************************
Statistics on Hong Kong's Gross National Product (GNP) and External Factor Income Flows (EFIF) for the first quarter of 2007 are released today (June 14) by the Census and Statistics Department (C&SD).
In the first quarter of 2007, Hong Kong's GNP increased by 11.9% over a year earlier to $397.7 billion at current market prices. The Gross Domestic Product (GDP), estimated at $370.3 billion at current market prices in the same quarter, recorded a 6.6% increase during the period. Compared with GDP, the value of Hong Kong's GNP was larger by $27.4 billion in the first quarter of 2007, representing a net external factor income inflow of the same amount, and equivalent to 7.4% of GDP in that quarter.
After netting out the effect of price changes, Hong Kong's GNP increased by 10.6% in real terms in the first quarter of 2007 over a year earlier. This was higher than the corresponding increase of 5.6% recorded for GDP in the same quarter.
Total factor income inflow into Hong Kong, estimated at $191.8 billion in the first quarter of 2007 and equivalent to 51.8% of GDP in that quarter, increased significantly by 28.5% over a year earlier. Total factor income outflow, estimated at $164.4 billion in the first quarter of 2007 and equivalent to 44.4% of GDP of the same period, also increased by 16.4% over a year earlier. Taking the inflow and outflow together, a net external factor income inflow of $27.4 billion was recorded in the first quarter of 2007.
Within total factor income inflow, Direct Investment Income (DII) increased significantly by 28.8% over a year earlier, mainly due to increased earnings of some prominent local enterprises from investment abroad. Portfolio Investment Income (PII) increased by 17.5%, mainly attributable to the increase in interest income received from holding of non-resident debt securities. Other Investment Income (OII) surged by 43.7%, mainly due to increased interest income from offshore loans and deposits, 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 15.0% over a year earlier, mainly attributable to sustained growth in earnings of some prominent multinational enterprises from direct investment in Hong Kong. PII increased by 13.6%, mainly attributable to the increase in dividend pay-outs by a number of resident publicly listed companies. OII also recorded a substantial increase of 24.0% over a year earlier, 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 first quarter of 2007, accounting for 27.9%. British Virgin Islands (BVI) came next, with a share of 22.2%, 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 Kingdom and the United States of America, at 9.5% and 8.9% respectively.
The mainland of China and BVI remained the most important destinations for Hong Kong's external factor income outflow in the first quarter of 2007, accounting for 24.5% and 23.2% respectively. Other major destination countries/territories included the Netherlands, at 10.6%, and the United States of America, at 7.1%.
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 second quarter of 2005 to the first quarter of 2007 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 and 2007 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, June 14, 2007
Issued at HKT 16:15
NNNN
