Hong Kong Q3 GDP rises 1.9 pct y/y driven by private consumption

Hong Kong's Q3 Gross Domestic Product (GDP) increased by 1.9 percent in real terms over a year earlier, compared with the 1.7 percent increase in the second quarter of 2016, data released by Hong Kong's Census and Statistics Department showed on Friday. On a quarterly basis Q3 GDP increased by 0.6 percent q/q in real terms.

Details of the report showed private consumption expenditure increased by 1.2 percent y/y in real terms compared with the 0.5 percent growth in Q2. Government consumption expenditure increased by 3.3 percent y/y in real terms from 3.5 percent in the second quarter.

Hong Kong’s economy grew faster than economists' forecasts in Q3, proving more resilient than many feared. A steady jobs market underpins demand and a rebound in stock trading and the property market helped boost local spending. Exports also improved along with the stabilization in regional trade.

Hong Kong’s government forecasts GDP growth for 2016 at 1.5 percent -- the mid-point of the range forecast of 1 to 2 percent announced in August. That said, it notes considerable uncertainties in the external environment in the period ahead on the back of the looming interest rate hike in the U.S., monetary policy divergence among major central banks, possible policy changes in the U.S. after the election, unfolding Brexit event and still elevated geopolitical tensions in various regions.

"Domestic demand has remained resilient thus far and should continue to provide support to the economy in the rest of the year," the government said in a statement.