Gross Domestic Product for the 1st quarter 2009

GDP by expenditure component for the first quarter of 2009

• In the first quarter of 2009, the Gross Domestic Product (GDP) declined by 7.8% in real terms from a year earlier, compared with the 2.6% decrease in the fourth quarter of 2008.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP declined by 4.3% in real terms in the first quarter of 2009. 
• Analysed by major GDP component, private consumption expenditure contracted by 5.5% in real terms in the first quarter of 2009 from a year earlier, following the 4.1% decline in the fourth quarter of 2008.
• Government consumption expenditure in national accounts terms increased mildly by 1.5% in real terms in the first quarter of 2009 over a year earlier, compared with the growth of 1.8% in the fourth quarter of 2008.
• Gross domestic fixed capital formation (GDFCF) decreased by 12.6% in real terms in the first quarter of 2009, moderating from the 17.8% decline in the fourth quarter of 2008.
• Within the total GDFCF, expenditure on machinery, equipment and computer software decreased by 6.6% in real terms in the first quarter of 2009 from a year earlier, moderating notably from the 21.1% decrease in the fourth quarter of 2008.
• Expenditure on building and construction decreased by 8.2% in real terms in the first quarter of 2009 from a year earlier, as against the 0.1% marginal increase in the fourth quarter of 2008.
• Expenditure on building and construction of the private sector decreased by 9.2% in real terms in the first quarter of 2009 and that of the public sector also registered a decline of 5.1%.
• Over the same period, total exports (comprising re-exports and domestic exports) decreased markedly by 22.7% in real terms, compared with the 4.9% decrease in the fourth quarter of 2008. Imports of goods also decreased substantially by 21.4% in real terms in the first quarter of 2009.
• Exports of services decreased by 8.2% in real terms in the first quarter of 2009 from a year earlier, as compared to the 0.4% marginal increase in the fourth quarter of 2008. Imports of services also dropped by 10.9% in real terms in the first quarter of 2009.
• The implicit price deflator of GDP, as a broad measure of overall inflation in the economy, recorded a year-on-year increase of 0.5% in the first quarter of 2009, as against the 0.2% decline in the fourth quarter of 2008.
• The chain volume measures of GDP and its components have been re-referenced from 2006 to 2007. Re-referencing affects the levels, but not the rates of change, of the chain volume measures. Besides, the volume estimates for 2008, which were previously valued at 2006 prices, have been revalued at 2007 prices. This rebasing of the volume measures could affect the real growth rates of the annual and quarterly GDP for 2008. 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 of the volume measures for 2008, the GDP real growth rates for the second, third and fourth quarters of 2008 were revised slightly downwards from 4.3%, 1.7% and -2.5% to 4.1%, 1.5% and -2.6% respectively. The GDP real growth rate for 2008 as a whole was also revised slightly downwards from 2.5% to 2.4% 

GDP by economic activity for the fourth quarter of 2008 and the whole year of 2008

• The preliminary figures of chain volume measures of GDP by economic activity for the fourth quarter of 2008 and the whole year of 2008, which were released in mid-March 2009, were revised as more data became available.
• The revised figures showed that net output in all the service activities taken together decreased by 2.3% in real terms in the fourth quarter of 2008 from a year earlier, compared with the growth of 1.7% in the third quarter. For 2008 as a whole, there was an increase of 2.4% in real terms.
• 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 decreased by 2.1% in real terms in the fourth quarter of 2008 from a year earlier, compared with the 4.2% increase in the third quarter. For 2008 as a whole, net output in this sector increased by 4.1% in real terms compared with the 6.6% increase in 2007. The moderation of growth in 2008 was attributable to the substantial slowdown in both external and domestic demand amid the deepening global economic downturn towards the latter part of the year.
• Net output in the transport, storage and communications sector decreased by 4.3% in real terms in the fourth quarter of 2008 from a year earlier, compared with the increase of 2.0% in the third quarter. For 2008 as a whole, net output in this sector rose by 2.2% in real terms compared with the 5.1% increase in 2007. The notable slowdown in 2008 was in line with the weakened external trade activities over the course of the year.
• Net output in the financing, insurance, real estate and business services sector decreased by 4.9% in real terms in the fourth quarter of 2008 from a year earlier, compared with the 0.5% decrease in the third quarter. For 2008 as a whole, net output in this sector increased by 1.6% in real terms compared with the 13.5% increase in 2007. The significant deterioration in 2008 reflected the dampening of a wide spectrum of financial market and property market activities caused by the financial tsunami.
• Net output in the community, social and personal services sector increased by 0.7% in real terms in the fourth quarter of 2008 over a year earlier, compared with the 1.7% rise in the third quarter. For 2008 as a whole, net output in this sector increased by 1.4% in real terms.
• Net output in the local manufacturing sector decreased by 10.4% in real terms in the fourth quarter of 2008 from a year earlier, compared with the decrease of 6.7% in the third quarter. For 2008 as a whole, net output in this sector decreased by 6.6% in real terms.
• Net output in the electricity, gas and water sector recorded an increase of 2.2% in real terms in the fourth quarter of 2008 over a year earlier, compared with the decrease of 1.3% in the third quarter. For 2008 as a whole, net output in this sector increased marginally by 0.2% in real terms.
• As for the construction sector, net output increased by 2.8% in real terms in the fourth quarter of 2008 over a year earlier, compared with the 1.5% decrease in the third quarter. For 2008 as a whole, net output in the construction sector increased by 2.7% 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 2006 to 2007, the year-on-year rates of change of the quarterly chain volume measures of GDP by economic activity for 2008 were revised accordingly.

GDP by economic activity at current prices for 2007

• 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 2007 showed that the financing, insurance, real estate and business services accounted for the largest share (29.1%) of the GDP, followed by the wholesale, retail and import and export trades, restaurants and hotels (26.9%), and community, social and personal services (17.1%).