Hong Kong BOP deficit hits $7.1 billion

Hong Kong recorded a balance of payments deficit of $7.1 billion in 2Q12, as against a surplus of $63.8 billion in the first quarter.

The Census & Statistics Department said reserve assets fell by the same amount. The current account recorded a deficit of $9.3 billion (as a ratio of 2.0% to GDP), as against a surplus of $10.6 billion (as a ratio of 2.3% to GDP) in the same quarter of last year.

The drop in the current account balance was due to an increase in the visible trade deficit, a decrease in the net inflow of primary income and an increase in the net outflow of secondary income, partly offset by an increase in the invisible trade surplus.

With imports of goods increasing faster than exports of goods, the visible trade deficit increased from $44.7 billion in the second quarter of 2011 to $72.4 billion in the same quarter this year.

On the other hand, the invisible trade surplus increased from $32.6 billion in the second quarter of 2011 to $46.5 billion in the same quarter this year, as exports of services increased and imports of services decreased. Overall, a combined visible and invisible trade deficit of $25.8 billion was recorded in the second quarter, larger than that of $12.1 billion in the same quarter of 2011.