ECONOMY SHRINKS 4% IN Q1

Hong Kong’s economy in the first quarter of 2022 contracted by 4% from a year earlier, the Census & Statistics Department announced today.

According to the advance estimates on gross domestic product (GDP) for the first quarter, on a seasonally adjusted quarter-to-quarter comparison, GDP dipped by 2.9% in real terms in the first quarter of 2022 compared with the preceding quarter.

Private consumption expenditure dropped by 5.4% in real terms in the second quarter year-on-year, while government consumption expenditure grew by 5.9%. Gross domestic fixed capital formation decreased by 8.3%, deteriorating from the 0.6% decrease in the fourth quarter of 2021.

Over the same period, total goods exports recorded a decline of 4.5% and goods imports decreased by 5.9%. Both exports and imports of services fell by 2.8%.

The Government said Hong Kong’s economy faced immense pressure in the first quarter this year. Externally, moderating global demand growth and COVID-19 epidemic-induced cross boundary transportation disruptions posed substantial drags to exports. Domestically, economic activities as well as economic sentiment were hard hit by the fifth wave of local epidemic and the resultant anti-epidemic measures.

Looking ahead, the global economy will continue to face significant challenges in the near term. Rampant inflation has seen major central banks expedite their monetary policy tightening, weighing on the economic outlook.

Furthermore, tensions in Ukraine will likely keep international energy and commodity prices high, aggravate supply chain disruptions and dampen economic sentiment. At the same time, the evolving global pandemic and development of China-US relations will continue to pose uncertainty.

Nonetheless, with the central government’s support and the community’s effort, the local epidemic has been receding since early March, allowing for the gradual relaxation of social distancing measures.

This, together with the Government’s various support measures, should help the revival of domestic demand in the remainder of 2022.

The improving local epidemic situation should also be conducive to the alleviation of cross-boundary transportation disruptions and hence the recovery of trading activities.

The revised GDP figures for the first quarter of 2022 and the whole year will be released on May 13, the Government added.

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