MNI BRIEF: Hong Kong Q1 GDP Up 2.7% Y/Y

Hong Kong’s economy grew an as expected 2.7% y/y in Q1, up from 0% in the final quarter of 2022, as private consumption rose 13.0%, a report released by the government Friday showed. Goods exports dropped 18.7% y/y, a slight improvement on -24.9% at previous. The government said exports remained weak due to a “challenging external environment”.

The report noted that despite monetary tightening, fixed asset investment rose 5.8% y/y from previous -8.9%. Machinery expenditure increased 24% y/y. Unemployment declined from 3.5% in Q4 2022, to 3.1% in the first quarter of 2023, and the government's business confidence outlook index for Q2 improved by 15pp from previous.

Authorities are forecasting GDP to grow by 3.5%–5.5% for the whole year of 2023, but acknowledged the outlook remains uncertain, according to a central bank report published last month.