Hong Kong's GDP pegged to hit 3.3% in 2Q

Improved performance, says analyst.

According to Hang Seng Bank's Hong Kong Economic Monitor, Hong Kong will release its advance GDP estimate for the second quarter on 16th August. Data over the past three months point to an improvement in economic performance last quarter.

Consumer spending has held up quite well, with retail sales volume rising 15% in the second quarter. Business investment, another key component of domestic demand, appears to have found its footing as well. Less encouraging is the persistent weakness in exports.

Overall, Hang Seng Bank expects GDP growth in the second quarter to accelerate to 3.3% from 2.8% in the first quarter.

Here's more:

In the second half, these trends are likely to continue. Private consumption will continue to benefit from a strong labour market. But the scope for domestic demand to strengthen further has become more limited.

The key question remains whether the firming growth in the US and Japan could offset the drag from an economic slowdown in mainland China.

Given an increased dependence on the Mainland for growth, we do not see much possibility of a significant export expansion in the near term. We have therefore revised our export growth forecast downward from 6% to 4%.

For the full-year GDP growth, we continue to project a relatively stable 3% growth this year.