Gross Domestic Product for the 4th quarter 2018

GDP by expenditure component for the fourth quarter and the whole year of 2018

• In the fourth quarter of 2018, the Gross Domestic Product (GDP) increased by 1.3% in real terms over a year earlier, compared with the increase of 2.8% in the third quarter. For 2018 as a whole, GDP increased by 3.0% in real terms over 2017.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP decreased by 0.3% in real terms in the fourth quarter of 2018 when compared with the third quarter.
• Analysed by major GDP component, private consumption expenditure (PCE) continued to increase, by 3.1% in real terms in the fourth quarter of 2018 over a year earlier, after the 4.8% growth in the third quarter. For 2018 as a whole, PCE increased by 5.6% in real terms over 2017.
• Government consumption expenditure (GCE) measured in national accounts terms increased by 5.0% in real terms in the fourth quarter of 2018 over a year earlier, compared with the increase of 3.3% in the third quarter. For 2018 as a whole, GCE increased by 4.2% in real terms over 2017.
• Gross domestic fixed capital formation (GDFCF) decreased by 5.4% in real terms in the fourth quarter of 2018 from a year earlier, as against the increase of 9.2% in the third quarter. For 2018 as a whole, GDFCF increased by 2.2% in real terms over 2017.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products increased by 4.6% in real terms in the fourth quarter of 2018 over a year earlier, slower than the increase of 21.0% in the third quarter.
• On the other hand, expenditure on building and construction in GDFCF decreased by 6.0% in real terms in the fourth quarter of 2018 from a year earlier, as against the increase of 1.1% in the third quarter. Within this category, expenditure on building and construction in respect of private and public sectors decreased by 2.2% and 12.9% respectively in real terms in the fourth quarter of 2018.
• Over the same period, total exports of goods decreased slightly by 0.2% in real terms from a year earlier, as against the increase of 5.0% in the third quarter. Imports of goods decreased by 0.8% in real terms in the fourth quarter of 2018, as against the increase of 7.7% in the third quarter. For 2018 as a whole, total exports of goods and imports of goods recorded increases of 3.5% and 4.9% respectively in real terms over 2017.
• Exports of services increased by 2.9% in real terms in the fourth quarter of 2018 over a year earlier, compared with the increase of 3.4% in the third quarter. Imports of services increased by 2.0% in real terms in the fourth quarter of 2018, compared with the increase of 2.5% in the third quarter. For 2018 as a whole, exports of services and imports of services recorded increases of 4.9% and 2.2% respectively in real terms over 2017.
• The implicit price deflator (IPD) of GDP, as a broad measure of overall inflation in the economy, increased by 3.4% in the fourth quarter of 2018 over a year earlier, compared with the increase of 3.9% in the third quarter. For 2018 as a whole, the IPD of GDP increased by 3.7% over 2017.
• 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 2017 remained at 3.8%. For 2018, the year-on-year real growth rates of GDP for the first and second quarters remained at 4.6% and 3.5% respectively, while that for the third quarter was revised downwards slightly from 2.9% to 2.8%.

GDP by economic activity for the third quarter of 2018

• The preliminary figures of chain volume measures of GDP by economic activity for the third quarter of 2018, which had already been released in late December 2018, 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 3.2% in real terms in the third quarter of 2018 over a year earlier, compared with the 3.7% increase in the second quarter.
• Analysed by constituent services sector and on a year-on-year comparison, net output in the import and export, wholesale and retail trades sector increased by 5.1% in real terms in the third quarter of 2018 over a year earlier, after the growth of 5.8% in the second quarter. The further notable growth of merchandise trade during the quarter rendered support to the continued growth of this sector.
• Net output in the financing and insurance sector increased by 3.7% in real terms in the third quarter of 2018 over a year earlier, compared with the growth of 4.8% in the second quarter. Stock trading activities cooled off further during the quarter, leading to a narrower growth of this sector.
• Net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector grew by 3.5% in real terms in the third quarter of 2018 over a year earlier, compared with the growth of 4.3% in the second quarter.
• Net output in the transportation, storage, postal and courier services sector registered an increase of 1.5% in real terms in the third quarter of 2018 over a year earlier, following the growth of 4.0% in the second quarter.
• Net output in the information and communications sector increased by 3.2% in real terms in the third quarter of 2018 over a year earlier, compared with the growth of 3.4% in the second quarter.
• Net output in the real estate, professional and business services sector rose by 1.5% in real terms in the third quarter of 2018 over a year earlier, after the growth of 2.1% in the second quarter.
• Net output in the public administration, social and personal services sector increased by 3.0% in real terms in the third quarter of 2018 over a year earlier, compared with the growth of 2.5% in the second quarter.
• As for sectors other than the services sectors, net output in the local manufacturing sector rose by 1.2% in real terms in the third quarter of 2018 over a year earlier, compared with the 1.6% growth in the second quarter.
• Net output in the electricity, gas and water supply, and waste management sector dropped by 4.3% in real terms in the third quarter of 2018 from a year earlier, as against the increase of 4.2% in the second quarter.
• Net output in the construction sector recorded an increase of 2.4% in real terms in the third quarter of 2018 from a year earlier, as against the decrease of 0.8% in the second quarter.

GDP by economic activity at current prices for 2017

• 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 2017 showed that the import and export, wholesale and retail trades sector accounted for the largest share (21.5%) of the GDP, followed by the financing and insurance sector (18.9%), and the public administration, social and personal services sector (18.2%).

GNI for the third quarter of 2018

• The preliminary figures of Gross National Income (GNI) for the third quarter of 2018, which were released in mid-December 2018, were also revised accordingly based on the revised GDP estimates..
• In the third quarter of 2018, GNI increased by 8.8% over a year earlier to $768.3 billion at current market prices, compared with the 7.5% increase in the second quarter of 2018.
• Measured at current market prices, the value of GNI was larger than GDP by $41.7 billion in the third quarter of 2018, representing a net external primary income inflow of the same amount, and equivalent to 5.7% of GDP in that quarter.
• After netting out the effect of price changes, real GNI increased by 5.0% in the third quarter of 2018 over a year earlier.
• Total primary income inflow into Hong Kong, estimated at $432.8 billion in the third quarter of 2018 and equivalent to 59.6% of GDP in that quarter, increased by 15.2% 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 8.9%, 14.7%, 64.6% and 46.0% respectively over a year earlier.
• Total primary income outflow, estimated at $391.1 billion in the third quarter of 2018 and equivalent to 53.8% of GDP in that quarter, increased by 11.8% over a year earlier. Regarding the major components of total primary income outflow, DII, PII and OII increased by 6.1%, 19.1% and 64.7% respectively over a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $41.7 billion was recorded in the third quarter of 2018, compared with the net income inflow of $56.6 billion in the second quarter of 2018.