GDP by expenditure component for the fourth quarter and the whole year of 2016

- In the fourth quarter of 2016, the Gross Domestic Product (GDP) increased by 3.1% in real terms over a year earlier, compared with the 2.0% increase in the third quarter. For 2016 as a whole, GDP increased by 1.9% in real terms over 2015.
- On a seasonally adjusted quarter-to-quarter comparison basis, GDP increased by 1.2% in real terms in the fourth quarter when compared with the third quarter of 2016.
- Analysed by major GDP component, private consumption expenditure (PCE) continued to increase by 3.2% in real terms in the fourth quarter of 2016 over a year earlier, after the 1.2% growth in the third quarter. For 2016 as a whole, PCE increased by 1.6% in real terms over 2015.
- Government consumption expenditure (GCE) measured in national accounts terms increased by 3.3% in real terms in the fourth quarter of 2016 over a year earlier, same as the growth in the third quarter. For 2016 as a whole, GCE increased by 3.3% in real terms over 2015.
- Gross domestic fixed capital formation (GDFCF) increased by 5.2% in real terms in the fourth quarter of 2016 over a year earlier, compared with the 6.7% increase in the third quarter. For 2016 as a whole, GDFCF decreased by 0.5% in real terms from 2015.
- Within the total GDFCF, expenditure on machinery, equipment and intellectual property products decreased by 4.2% in real terms in the fourth quarter of 2016 from a year earlier, as against the increase of 7.6% in the third quarter.
- On the other hand, expenditure on building and construction in GDFCF increased by 6.9% in real terms in the fourth quarter of 2016 over a year earlier, compared with the increase of 3.5% in the third quarter. Within this category, expenditure on building and construction in respect of the private sector increased by 2.5% in real terms in the fourth quarter of 2016 while that of the public sector by 15.1%.
- Over the same period, total exports of goods increased by 5.1% in real terms over a year earlier, compared with the increase of 2.4% in the third quarter of 2016. Imports of goods increased by 5.5% in real terms in the fourth quarter of 2016, compared with the 3.1% increase in the third quarter. For 2016 as a whole, total exports of goods and imports of goods recorded increases of 1.7% and 1.0% respectively in real terms over 2015.
- Exports of services increased by 1.4% in real terms in the fourth quarter of 2016 over a year earlier, as against the 2.4% decrease in the third quarter. Imports of services increased by 1.8% in real terms in the fourth quarter of 2016, compared with the 0.7% increase in the third quarter. For 2016 as a whole, exports of services and imports of services recorded 3.1% decrease and 1.9% increase respectively in real terms over 2015.
- The implicit price deflator (IPD) of GDP, as a broad measure of overall inflation in the economy, increased by 1.6% in the fourth quarter of 2016 over a year earlier, compared with the 1.5% increase in the third quarter. For 2016 as a whole, the IPD of GDP increased by 1.8% over 2015.
- After incorporation of the latest information available, while the value of GDP was slightly revised, the year-on-year growth rate of GDP in real terms recorded in the whole year of 2015 remained at 2.4%. For 2016, the year-on-year real growth rates of GDP for the first and third quarters were revised upwards from 0.8% and 1.9% to 1.0% and 2.0% respectively, while that for the second quarter remained at 1.7%.

**GDP by economic activity for the third quarter of 2016 **

- The preliminary figures of chain volume measures of GDP by economic activity for the third quarter of 2016, which had already been released in late December 2016, were subsequently revised as more data became available.
- The revised figures showed that net output in respect of all the services activities taken together increased by 2.3% in real terms in the third quarter of 2016 over a year earlier, compared with the 2.7% rise in the second quarter of 2016.
- Analysed by constituent services sector and on a year-on-year comparison, output in the import and export, wholesale and retail trades sector registered an increase of 0.7% in real terms in the third quarter of 2016 over a year earlier, similar to the growth of 0.8% in the second quarter. This was mainly attributable to the sustained modest growth in the merchandise trade during the quarter.
- Net output in the financing and insurance sector grew by 4.8% in real terms in the third quarter of 2016 over a year earlier, compared with the increase of 4.5% in the second quarter. The continued growth of this sector was mainly underpinned by the rebounded stock trading activities and fund raising activities during the quarter.
- Net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector rose by 0.3% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 0.9% in the second quarter.
- Net output in the transportation, storage, postal and courier services sector increased by 3.5% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 3.3% in the second quarter.
- Net output in the information and communications sector grew by 3.5% in real terms in the third quarter of 2016 over a year earlier, after the increase of 4.3% in the second quarter.
- Net output in the real estate, professional and business services sector rosed by 3.1% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 3.7% in the second quarter.
- Net output in the public administration, social and personal services sector increased by 2.4% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 3.3% in the second quarter.
- As for sectors other than the services sectors, net output in the local manufacturing sector recorded a marginal decline of 0.1% in real terms in the third quarter of 2016 from a year earlier, after the decrease of 0.4% in the second quarter.
- Net output in the electricity, gas and water supply, and waste management sector registered an increase of 0.7% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 0.1% in the second quarter.
- Net output in the construction sector registered an increase of 2.4% in real terms in the third quarter of 2016 over a year earlier, compared with the growth of 0.9% in the second quarter.

**GDP by economic activity at current prices for 2015**

- Statistics on GDP by economic activity at current prices, which are compiled mainly based on data collected from the annual economic surveys, are useful for analysis of the contribution of different economic activities to the total GDP.
- The revised figures of GDP by economic activity at current prices for 2015 showed that the import and export, wholesale and retail trades sector accounted for the largest share (22.7%) of the GDP, followed by the financing and insurance sector (17.6%), and the public administration, social and personal services sector (17.5%).

**GNI for the third quarter of 2016**

- The preliminary figures of Gross National Income (GNI) for the third quarter of 2016, which were released in mid-December 2016, were also revised accordingly based on the revised GDP estimates.
- In the third quarter of 2016, GNI increased by 5.2% over a year earlier to $651.2 billion at current market prices, compared with the 4.8% increase in the second quarter of 2016.
- Measured at current market prices, the value of GNI was larger than GDP by $15.3 billion in the third quarter of 2016, representing a net external primary income inflow of the same amount, and equivalent to 2.4% of GDP in that quarter.
- After netting out the effect of price changes, real GNI increased by 3.3% in the third quarter of 2016 over a year earlier.
- Total primary income inflow into Hong Kong, estimated at $317.4 billion in the third quarter of 2016 and equivalent to 49.9% of GDP in that quarter, increased by 5.3% over a year earlier. As for the major components of total primary income inflow, direct investment income (DII), portfolio investment income (PII), other investment income (OII) and income on reserve assets increased by 4.1%, 8.4%, 4.1% and 17.3% respectively over a year earlier.
- Total primary income outflow, estimated at $302.1 billion in the third quarter of 2016 and equivalent to 47.5% of GDP in that quarter, increased by 1.8% over a year earlier. Regarding the major components of total primary income outflow, DII and OII increased by 1.6% and 15.6% respectively over a year earlier. PII decreased by 2.1% from a year earlier.
- Taking the inflow and outflow together, a net external primary income inflow of $15.3 billion was recorded in the third quarter of 2016, compared with the net income inflow of $38.4 billion in the second quarter of 2016.

* * * * * * *