Gross Domestic Product for the 4th quarter 2019

GDP by expenditure component for the fourth quarter and the whole year of 2019

• In the fourth quarter of 2019, the Gross Domestic Product (GDP) decreased by 2.9% in real terms from a year earlier, compared with the decrease of 2.8% in the third quarter.  For 2019 as a whole, GDP decreased by 1.2% in real terms from 2018.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP decreased by 0.3% in real terms in the fourth quarter of 2019 when compared with the third quarter.
• Analysed by major GDP component, private consumption expenditure (PCE) decreased by 2.9% in real terms in the fourth quarter of 2019 from a year earlier, compared with the 3.3% decline in the third quarter. For 2019 as a whole, PCE decreased by 1.1% in real terms from 2018.
• Government consumption expenditure (GCE) measured in national accounts terms grew by 6.0% in real terms in the fourth quarter of 2019 over a year earlier, after the increase of 5.9% in the third quarter. For 2019 as a whole, GCE increased by 5.1% in real terms over 2018.
• Gross domestic fixed capital formation (GDFCF) decreased significantly by 16.7% in real terms in the fourth quarter of 2019 from a year earlier, compared with the decrease of 15.2% in the third quarter. For 2019 as a whole, GDFCF decreased by 12.3% in real terms from 2018.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products decreased notably by 32.2% in real terms in the fourth quarter of 2019 from a year earlier, larger than the decline of 26.4% in the third quarter.
• On the other hand, expenditure on building and construction in GDFCF dropped by 6.2% in real terms in the fourth quarter of 2019 from a year earlier, after the decline of 3.7% in the third quarter. Within this category, expenditure on building and construction in respect of private and public sectors decreased by 7.4% and 3.8% respectively in real terms in the fourth quarter of 2019.
• Over the same period, total exports of goods recorded a decline of 2.7% in real terms from a year earlier, compared with the decrease of 6.9% in the third quarter of 2019. Imports of goods dropped by 7.3% in real terms in the fourth quarter of 2019, compared with the decline of 11.0% in the third quarter. For 2019 as a whole, total exports of goods and imports of goods recorded decreases of 4.7% and 7.4% respectively in real terms from 2018.
• Exports of services fell by 24.7% in real terms in the fourth quarter of 2019 from a year earlier, deteriorating from the drop of 14.4% in the third quarter.  Imports of services decreased by 4.9% in real terms in the fourth quarter of 2019, compared with the decrease of 4.4% in the third quarter.  For 2019 as a whole, exports of services and imports of services recorded decreased by 10.4% and 2.3% respectively in real terms from 2018.
• The implicit price deflator (IPD) of GDP, as a broad measure of overall inflation in the economy, increased by 1.7% in the fourth quarter of 2019 over a year earlier, compared with the increase of 2.3% in the third quarter.  For 2019 as a whole, the IPD of GDP increased by 2.4% over 2018.
• As compared with the figures published in the last quarterly report, after incorporation of the latest information available, the year-on-year growth rate of GDP in real terms in the whole year of 2018 was revised from 3.0% to 2.9%.  For 2019, the year-on-year rates of change of GDP in real terms for the first and third quarters were revised from 0.6% to 0.7% and -2.9% to -2.8% respectively; while that for the second quarter remained unchanged.  As compared with the advance estimates released on 3 February 2020, the year-on-year rate of change of GDP in real terms for the fourth quarter of 2019 remained at the decrease of 2.9%; whereas on a seasonally adjusted quarter-to-quarter comparison basis, the decrease in real terms was revised from 0.4% to 0.3%.

GDP by economic activity for the third quarter of 2019

• The preliminary figures of chain volume measures of GDP by economic activity for the third quarter of 2019, which had already been released in late December 2019, were subsequently revised as more data became available.
• The revised figures showed that net output in respect of all the services activities taken together decreased by 1.7% in real terms in the third quarter of 2019 from a year earlier, as against the growth of 1.2% in the second quarter of 2019.
• Analysed by constituent services sector and on a year-on-year comparison, net output in the import and export, wholesale and retail trades sector dropped by 10.0% in real terms in the third quarter of 2019 from a year earlier, after the decrease of 3.7% in the second quarter. Enlarged decline in external merchandise trade amid a slowing global economy and intensified US-Mainland trade tensions, as well as further deterioration in retail sales led to a further decline in this sector during the quarter.
• Net output in the financing and insurance sector increased by 3.3% in real terms in the third quarter of 2019 over a year earlier, compared with the 3.1% rise in the second quarter. The resilient performance of the banking sector during the quarter rendered support to the continued growth in this sector.
• Net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector dropped by 13.8% in real terms in the third quarter of 2019 from a year earlier, following the decrease of 1.3% in the second quarter.
• Net output in the transportation, storage, postal and courier services sector decreased by 2.2% in real terms in the third quarter of 2019 from a year earlier, as against the increase of 1.9% in the second quarter.
• Net output in the information and communications sector increased by 5.5% in real terms in the third quarter of 2019 over a year earlier, compared with the 5.7% rise in the second quarter.
• Net output in the real estate, professional and business services sector recorded an increase of 0.4% in real terms in the third quarter of 2019 over a year earlier, compared with the growth of 2.0% in the second quarter.
• Net output in the public administration, social and personal services sector rose by 2.0% in real terms in the third quarter of 2019 over a year earlier, compared with the growth of 3.6% in the second quarter.
• As for sectors other than the services sectors, net output in the local manufacturing sector rose by 0.5% in real terms in the third quarter of 2019 over a year earlier, similar to the growth of 0.4% in the second quarter.
• Net output in the electricity, gas and water supply, and waste management sector increased by 1.7% in real terms in the third quarter of 2019 over a year earlier, as against the decrease of 1.1% in the second quarter.
• Net output in the construction sector decreased by 3.1% in real terms in the third quarter of 2019 from a year earlier, after the decrease of 10.8% in the second quarter.

GDP by economic activity at current prices for 2018

• 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 2018 showed that the import and export, wholesale and retail trades sector accounted for the largest share (21.4%) of the GDP, followed by the financing and insurance sector (19.7%), and the public administration, social and personal services sector (18.4%).

GNI for the third quarter of 2019

• The preliminary figures of Gross National Income (GNI) for the third quarter of 2019, which were released in mid-December 2019, were also revised accordingly based on the revised GDP estimates.
• In the third quarter of 2019, GNI decreased by 0.6% from a year earlier to $760.8 billion at current market prices, compared with the 3.9% increase in the second quarter of 2019.
• Measured at current market prices, the value of GNI was larger than GDP by $41.3 billion in the third quarter of 2019, 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 decreased by 3.4% in the third quarter of 2019 from a year earlier.
• Total primary income inflow into Hong Kong, estimated at $440.0 billion in the third quarter of 2019 and equivalent to 61.2% of GDP in that quarter, increased by 0.1% over a year earlier. As for the major components of total primary income inflow, direct investment income (DII) and income on reserve assets increased by 2.8% and 8.5% respectively over a year earlier. Portfolio investment income (PII) and other investment income (OII) decreased by 5.4% and 6.8% respectively from a year earlier.
• Total primary income outflow, estimated at $398.7 billion in the third quarter of 2019 and equivalent to 55.4% of GDP in that quarter, increased by 0.3% over a year earlier. Regarding the major components of total primary income outflow, DII increased by 1.5% over a year earlier. PII and OII decreased by 0.5% and 7.0% respectively from a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $41.3 billion was recorded in the third quarter of 2019, compared with the net income inflow of $61.0 billion in the second quarter of 2019.