HK's Q4 growth weakest in 3 years as trade war takes toll
HONG KONG: Hong Kong's economic growth halved in the fourth quarter and the outlook for the financial hub is clouded by a trade war between Washington and Beijing, Financial Secretary Paul Chan said yesterday, as he announced his budget for the special administrative region.
Hong Kong's open and trade-reliant economy has been buffeted by external risks, including the US-Sino trade war, an economic slowdown in China, cooling property prices and stock market volatility.
Mr Chan said the economy grew 1.3 per cent in the fourth quarter from a year earlier, the weakest increase since the first quarter of 2016. It was also lower than the downwardly revised 2.8 per cent growth in the previous three months.
The economy grew 3 per cent for the full-year 2018, slightly lower than the government's forecast of 3.2 per cent.
Ms Iris Pang, Greater China economist at ING, said in a report that the weaker-than-expected growth was due to spillover from the US-China trade dispute.
"This was mainly a result of the trade war, which dampened export activities and related jobs in Hong Kong and on the mainland, with negative feedback into consumption in Hong Kong."
Hong Kong's economy is forecast to expand 2 per cent to 3 per cent for this year and average 3 per cent growth from 2020-2023, Mr Chan said.
It is expected to record a budget surplus of HK$58.7 billion (S$10.1 billion) for 2018/2019, less than half the bumper surplus of HK$148.9 billion announced for the previous financial year. - REUTERS
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