GDP growth drops 8.9% YoY in Q1

This is due to the weak performance in both domestic and external demand.

Hong Kong’s GDP fell by 8.9% YoY in Q1 compared to the 3% decrease in Q4 2019, according to advanced estimates from the Census and Statistics Department (C&SD). This is said to be the largest decline on record since Q1 1974.

The decline of GDP was mainly attributable to the continued weak performance in both domestic and external demand, as affected by the COVID-19 pandemic.

On a seasonally adjusted QoQ basis, GDP contracted by 5.3% in the first quarter of 2020 when compared with the fourth quarter of 2019.

Private consumption expenditure dropped 10.2% YoY in Q1, deteriorating from the 2.9% decline in Q4 2019, whilst government consumption expenditure measured in national accounts terms grew by 8.3% YoY in the same period after climbing 6.1% in the previous quarter.

On the other hand, gross domestic fixed capital formation edged down 13.9% YoY in Q1, compared with the 16.8% fall in Q4 2019.

Over the same period, C&SD noted that total exports of goods measured in national accounts terms recorded a decline of 9.7% YoY, bigger than the 2.5% YoY in the previous quarter, whilst imports of goods measured in national accounts terms dropped by 10.9% YoY in Q1, against a decline of 7.0% in Q4 2019.

Meanwhile, exports of services crashed 37.8% YoY in Q1, compared with the 24.2% plunge in Q4 2019. Imports of services plummeted 25.4% YoY over the same period, compared with the decrease of 5.2% in the previous quarter.

According to the C&SD, a government spokesman said that the economic recession deepened in Hong Kong in Q1 2020, as the threat of COVID-19 seriously disrupted a wide range of local economic activities and supply chains in the region and the economic fallout became even more severe.