On May 3, 2024, the government statistics department released the preliminary estimate of the local Gross Domestic Product (GDP) for the first quarter of 2024, showing a real increase of 2.7% compared to the same period last year. This growth rate is lower than the 4.3% increase seen in the fourth quarter of 2023.
Analyzing the major components of the GDP, private consumption expenditure rose by 3.5% in the last quarter of the previous year and increased by 1.0% in the first quarter of this year compared to the same period last year. On the other hand, government consumption expenditure recorded a real decrease of 3.0%, compared to a 5.2% decrease in the fourth quarter. The total fixed capital formation in the local economy increased by 0.3% annually, a slowdown from the 17.5% growth in the fourth quarter.
In terms of trade, goods exports saw a real increase of 6.7% year-on-year, higher than the 2.8% increase in the fourth quarter. Goods imports rose by 3.2%, while the fourth-quarter increase was 3.8%. Service exports increased by 8.1% annually, lower than the 21.2% increase in the previous quarter; service imports also saw a decrease in growth to 17.6% from the previous quarter’s 26.7%.
When seasonally adjusted and compared quarter-on-quarter, the local GDP increased by 2.3% in the first quarter compared to the fourth quarter of the previous year.
A government spokesperson stated that Hong Kong’s economy experienced moderate growth in the first quarter. Mainly driven by a further increase in visitor arrivals, overall service exports continued to show significant growth. Despite external demand slightly improving, the overall growth in exports of goods was considerable, partly due to a very low base comparison. Domestically, with household incomes rising and various government measures stimulating the economy, private consumption expenditure saw a slight increase. Overall investment expenditure also rose slightly as the economy continued to expand.
Looking ahead, as the capacity for receiving visitors continues to recover and with the government’s efforts to promote major events economy, the further revival of the tourism industry should support service exports. Geopolitical tensions and tight financial conditions are expected to continue impacting goods exports; however, as external demand has been relatively stable, there may be a slight improvement in export performance. Locally, the increase in household income and various measures to boost the economy should support private consumption, although changes in consumer patterns may present challenges. The ongoing economic growth is expected to support fixed asset investment, but prolonged tight financial conditions could negatively affect economic confidence and activity.