Hong Kong: GDP growth again in first quarter after 18 months of recession | Scientist

Gross Domestic Production (StartIn Hong Kong it grew 7.8% in the first quarter of 2021, compared to the same period in 2020, according to a preliminary reading released by the government on Monday. For the fourth quarter, the increase was 5.3%.

Strong growth has brought Hong Kong’s GDP back to pre-epidemic levels from COVID-19According to the calculations of Tommy Wu, Chief Economist at Oxford Economics. After today’s results, he said it would raise its growth forecast for 2021, currently at 4%.

“A robust initial public offering pipeline will boost financial services exports,” Wu said. Domestically, we expect private consumption to recover more significantly in the second quarter of 2021, thanks to the government’s consumer voucher campaign next summer, as the vaccination program reduces the need for social distancing.

In the first quarter, trade led Hong Kong’s recovery. Exports grew 30.6% compared to the same period last year. The strong growth was mainly observed in shipments of electrical machinery, communication equipment, computers, and non-ferrous metals.

“The strong recovery in the first quarter mainly reflects strong growth in merchandise exports amid the global economic recovery led by the continent (China) and the United States,” a Hong Kong government spokesman said in a statement.

In the note, the city government notes this The recovery is uneven and activity in some sectors, such as tourism and consumption, remains below pre-pandemic levels..

Hong Kong recently relaxed restrictions, allowing entertainment venues such as bars and karaoke to reopen for people who have been vaccinated. It is also imperative to respect a series of rules to track potential covid-19 contacts.

Hong Kong’s retail sales grew by more than 30% in February compared to a year ago, while the unemployment rate fell to 6.8% in March. In February, the index was 7.2%, the highest level in 17 years.

Hong Kong’s Finance Minister, Paul Chan, expects the city’s economy to grow between 3.5% and 5.5% this year, with activities resuming after residents have been vaccinated.

The Hong Kong government has allocated $ 15.4 billion for the fiscal year that began in February for economic stimulus measures. A 6.7% increase in consumer spending helped the recovery in the first quarter.

Hong Kong’s economy contracted in 2019 and 2020, as the city struggled against a tripartite coup – a series of anti-government protests, the US-China trade war and the pandemic. Last year, GDP fell by 6.1%, which is worse than the decline recorded by 5.9% during the Asian financial crisis in 1998.

Chan wrote on his official blog on Sunday that the epidemic will continue to be an obstacle to Hong Kong’s growth and that vaccines are essential for a full economic recovery.

About 15% of Hong Kong residents have already received doses of vaccines, which is much lower than the levels recorded in the United States, the United Kingdom, and Singapore.

Hong Kong Monetary Authority Chief Executive Eddy Yu said the slow pace of vaccination could threaten the city’s standing as an international financial center, as this could leave it out of future travel arrangements.