Gross Domestic Product for the 1st quarter 2008

GDP by expenditure component for the first quarter of 2008

• In the first quarter of 2008, the Gross Domestic Product (GDP) increased by 7.1% in real terms over a year earlier, compared with the 6.9% growth in the fourth quarter of 2007.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP recorded an increase of 1.8% in real terms in the first quarter of 2008.
• Analysed by major GDP component, private consumption expenditure (PCE) grew by 7.9% in real terms in the first quarter of 2008 over a year earlier, compared with the 9.5% growth in the fourth quarter of 2007.
• Government consumption expenditure (GCE) in national accounts terms increased marginally by 0.3% in real terms in the first quarter of 2008 over a year earlier, compared with the growth of 2.3% in the fourth quarter of 2007.
• Gross domestic fixed capital formation (GDFCF) recorded an increase of 8.9% in real terms in the first quarter of 2008, slightly larger than the 8.2% growth in the fourth quarter of 2007.
• Within the total GDFCF, expenditure on machinery, equipment and computer software increased by 6.0% in real terms in the first quarter of 2008, compared with the 8.5% increase in the fourth quarter of 2007.
• Expenditure on building and construction increased by 5.2% in real terms in the first quarter of 2008 over a year earlier, reversing the 1.2% decline in the fourth quarter of 2007.
• Expenditure on building and construction of the private sector increased slightly by 1.4% in real terms in the first quarter of 2008 while that of the public sector registered a robust growth of 16.3%.
• Over the same period, total exports (comprising re-exports and domestic exports) increased by 8.3% in real terms, slightly higher than the 5.7% in the fourth quarter of 2007. Imports of goods also increased by 8.4% in real terms in the first quarter of 2008.
• Exports of services increased by 10.8% in real terms in the first quarter of 2008 over a year earlier, after a 13.1% increase in the fourth quarter of 2007. Imports of services grew by 11.3% in real terms in the first quarter of 2008.
• The implicit price deflator (IPD) of GDP, as an overall measure of inflation in the economy, recorded a year-on-year increase of 2.3% in the first quarter of 2008, compared with the 4.9% increase in the fourth quarter of 2007. 
• The chain volume measures of GDP and its components, which were introduced in October 2007, have been re-referenced from 2005 to 2006 starting from this issue of report. Re-referencing affects the levels, but not the rates of change, of the chain volume measures. Besides, the volume estimates for 2007, which were previously valued at 2005 prices, have been revalued at 2006 prices. This rebasing of the volume measures could affect the real growth rates of the annual and quarterly GDP for 2007. Such re-referencing and rebasing are annual updating exercises following the introduction of the annually re-weighted chain linking approach in compiling the volume measures of GDP.
• After incorporation of the latest information available and rebasing the volume measures for 2007, the GDP real growth rate for the second quarter of 2007 was revised slightly downwards from 6.4% to 6.2%, while those of the third and fourth quarters of 2007 were revised upwards from 6.3% and 6.7% to 6.8% and 6.9% respectively. The GDP real growth rate for 2007 as a whole was also revised slightly upwards from 6.3% to 6.4%. 

GDP by economic activity for the fourth quarter of 2007 and the whole year of 2007

• The preliminary figures of chain volume measures of GDP by economic activity for the fourth quarter of 2007 and the whole year of 2007, which were released in end-March 2008, were revised as more data became available.
• The revised figures showed that net output in all the service activities taken together rose by 7.8% in real terms in the fourth quarter of 2007 over a year earlier, compared with the growth of 7.3% in the third quarter. For 2007 as a whole, there was an increase of 7.5%. 
• Analysed by constituent sector and on a year-on-year comparison, net output in the wholesale, retail and import and export trades, restaurants and hotels sector increased by 7.3% in real terms in the fourth quarter of 2007 over a year earlier, same as the growth in the third quarter. For 2007 as a whole, net output in this sector increased by the same 7.3% in real terms. The continuous growth in external trade and offshore trade, robust local consumer demand and vibrant inbound tourism all contributed to the growth.
• Net output in the transport, storage and communications sector increased by 6.6% in real terms in the fourth quarter of 2007 over a year earlier, compared with the increase of 6.0% in the third quarter. For 2007 as a whole, net output in this sector increased by 5.4% in real terms. The sustained growth in external trade underpinned the growth in transport and storage services.
• Net output in the financing, insurance, real estate and business services sector rose by 16.6% in real terms in the fourth quarter of 2007 over a year earlier, compared with the 15.5% increase in the third quarter. For 2007 as a whole, net output in this sector increased by 15.0% in real terms. The growth impetus came mainly from the robust performance of the financial sector, underpinned by the buoyant stock market activity.
• Net output in the community, social and personal services sector increased by 1.3% in real terms in the fourth quarter of 2007 over a year earlier, compared with the 0.9% rise in the third quarter. For 2007 as a whole, net output in this sector increased by 1.2% in real terms.
• Net output in the local manufacturing sector decreased by 0.3% in real terms in the fourth quarter of 2007 from a year earlier, compared with the decrease of 2.1% in the third quarter. For 2007 as a whole, net output in this sector decreased by 1.5% in real terms.
• Net output in the electricity, gas and water sector had virtually no change in real terms in the fourth quarter of 2007 from a year earlier, compared with the rise of 0.4% in the third quarter. For 2007 as a whole, net output in this sector increased by 1.1% in real terms.
• As for the construction sector, net output decreased by 2.6% in real terms in the fourth quarter of 2007 from a year earlier, compared with the 2.8% decrease in the third quarter. For 2007 as a whole, net output in the construction sector decreased by 2.1% in real terms.
• As a result of the annual updating of the price structures and the reference year for the chain volume measures of GDP from 2005 to 2006, the year-on-year rates of change of the quarterly chain volume measures of GDP by economic activity for 2007 were revised accordingly.

GDP by economic activity at current prices for 2006

• The GDP by economic activity statistics 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 2006 showed that the wholesale, retail and import and export trades, restaurants and hotels accounted for the largest share (27.9%) of the GDP, followed by the financing, insurance, real estate and business services (25.0%), and community, social and personal services (18.0%).