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The Census and Statistics Department (C&SD) released today (22 September) the preliminary Balance of Payments (BoP) accounts and External Debt (ED) statistics for the second quarter of 2009.
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 $143.1 billion in its BoP account (at 36.4% of GDP) in the second quarter of 2009, compared with a surplus of $68.9 billion (at 18.2% of GDP) in the first quarter of 2009. Reserve assets correspondingly increased by the same amount in the second quarter of 2009.
Among the major BoP components, there was a current account surplus of $46.1 billion (at 11.7% of GDP) in the second quarter of 2009, larger than that of $43.0 billion (at 11.3% of GDP) in the first quarter of 2009. At the same time, a net inflow of financial non-reserve assets amounting to $72.2 billion (at 18.4% of GDP) was recorded in the second quarter of 2009, compared with a net inflow of $31.2 billion (at 8.2% of GDP) in the first quarter of 2009.
Current Account
The current account recorded a surplus of $46.1 billion in the second quarter of 2009, larger than that of $32.3 billion in the second quarter of 2008. Compared with the same quarter of 2008, the current account surplus in the second quarter of 2009 was characterised by a decrease in the visible trade deficit, a decrease in the invisible trade surplus, a decrease in the 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 $39.4 billion in the second quarter of 2009, from $62.0 billion in the same quarter of 2008. In addition, the invisible trade surplus decreased to $69.7 billion in the second quarter of 2009, from $79.8 billion in the same quarter of 2008, with exports of services decreasing faster than imports of services. Overall, a combined visible and invisible trade surplus of $30.4 billion was recorded in the second quarter of 2009, larger than that of $17.8 billion in the same quarter of 2008.
For factor income flows, the external factor income inflow and outflow amounted to $215.1 billion and $193.6 billion respectively, thus yielding a net inflow of $21.5 billion in the second quarter of 2009, compared with a net inflow of $22.0 billion in the same quarter of 2008.
A current transfers outflow of $6.8 billion and an inflow of $0.9 billion were recorded in the second quarter of 2009, resulting in a net outflow of $5.8 billion in that quarter, smaller than that of $7.5 billion in the same quarter of 2008.
Comparing the main current account components of the second quarter of 2009 with those of the first quarter of 2009 (this comparison may be affected by seasonal factors), the visible trade deficit increased from $34.8 billion to $39.4 billion, while the invisible trade surplus fell from $75.1 billion to $69.7 billion. Concurrently, the net inflow of external factor income increased from $8.6 billion to $21.5 billion, while the net outflow of current transfers decreased from $6.0 billion to $5.8 billion.
Capital and Financial Account
In the second quarter of 2009, a net inflow of capital transfers was estimated at $6.9 billion, compared with a net inflow of $7.4 billion in the first quarter of 2009.
An overall net inflow of financial non-reserve assets amounting to $72.2 billion was recorded in the second quarter of 2009, compared with a net inflow of $31.2 billion in the first quarter of 2009. The overall net inflow of financial non-reserve assets in the second quarter of 2009 was the combined result of a net outflow 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.
For direct investment (DI) flows, Hong Kong・s DI abroad increased by $117.8 billion while foreign DI in Hong Kong rose by $44.8 billion during the second quarter of 2009, resulting in a net DI outflow of $73.0 billion, as against a net inflow of $56.3 billion in the first quarter of 2009.
For portfolio investment (PI) flows, assets increased by $247.8 billion while liabilities increased by $20.4 billion in the second quarter of 2009. Taken together, there was a net PI outflow amounting to $227.4 billion in the second quarter of 2009, as against a net inflow of $74.9 billion in the first quarter of 2009. The rise in PI assets was mainly due to increased holdings of non-resident debt securities by Hong Kong residents. On the other hand, the rise in PI liabilities was attributable to increased holdings of resident equity securities by non-residents.
For financial derivatives (FD) flows, a net inflow of $14.9 billion due to cash settlement of FD was recorded in the second quarter of 2009, compared with a net inflow of $0.8 billion in the first quarter of 2009.
For other investment (OI) flows, assets decreased by $454.0 billion while liabilities decreased by $96.2 billion during the second quarter of 2009. Taken together, there was a net OI inflow of $357.8 billion in the second quarter of 2009, as against a net outflow of $100.8 billion in the first quarter of 2009. The reduction of OI assets was mainly due to a decrease in currency and deposits assets and loans assets of the banking sector. On the other hand, the decrease in OI liabilities was mainly due to a reduction in currency and deposits liabilities of the banking sector.
The 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 second quarter of 2009, reserve assets increased by $143.1 billion, compared with an increase of $68.9 billion in the first quarter of 2009. The accumulation of reserve assets was mainly due to purchases of foreign currencies with Hong Kong dollars and income from foreign currency assets during the quarter.
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-June 2009, Hong Kong's gross ED (measuring total outstanding gross external liabilities other than equity liabilities) amounted to $4,891.9 billion (at 299% of GDP). Compared with end-March 2009, gross ED decreased by $72.3 billion. This was mainly attributable to the decreases in ED of the banking sector, ED of other sectors and ED of the General Government which were larger than the increases in DI debt liabilities (inter-company lending) and ED of the HKMA.
Sectoral Analysis
At end-June 2009, a major proportion of Hong Kong・s ED was attributable to the banking sector, accounting for 73.8% of the total. Other ED consisted of debt liabilities to affiliated enterprises and direct investors under DI (with a share of 19.9%), ED of other sectors (6.0%), 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 $3,697.8 billion at end-March 2009 (at 225% of GDP) to $3,611.2 billion at end-June 2009 (at 221% of GDP), of which 98.0% ($3,540.2 billion) was short-term liabilities. Among these short-term liabilities, 97.7% ($3,457.3 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 $972.7 billion at end-June 2009. Within these, 78.4% ($763.0 billion) were debt liabilities to direct investors.
ED of other sectors amounted to $291.5 billion at end-June 2009, smaller than that of $297.1 billion at end-March 2009. Within this, 56.5% ($164.8 billion) was long-term liabilities, while the remaining 43.5% ($126.7 billion) was short-term liabilities. Among the long-term liabilities, 70.5% ($116.2 billion) were held in the form of loans, whereas 43.1% ($54.6 billion) of the short-term liabilities were trade credits.
ED of the General Government amounted to $12.3 billion at end-June 2009, 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 $4.2 billion at end-June 2009, larger than that of $3.9 billion at end-March 2009. At end-June 2009, a share of 90.5% ($3.8 billion) of ED of the HKMA was long-term liabilities of Exchange Fund Notes.
Table 4 gives the ED statistics by standard component.
Further information
For enquiries about 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 second quarter of 2009 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 of the estimates of BoP and ED are published in the publication Balance of Payments Statistics of Hong Kong, Second Quarter 2009. Users can download the publication free of charge on the website of C&SD (www.censtatd.gov.hk/products_and_services/products/publications/statistical_report/national_income_and_bop/index.jsp).
Ends/Tuesday, September 22, 2009
Issued at HKT 16:30
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