Gross Domestic Product for 2nd Quarter 2020

GDP by expenditure component for the second quarter of 2020

• In the second quarter of 2020, the Gross Domestic Product (GDP) decreased by 9.0% in real terms from a year earlier, compared with the decrease of 9.1% in the first quarter.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP decreased marginally by 0.1% in real terms in the second quarter of 2020 when compared with the first quarter.
• Analysed by major GDP component, private consumption expenditure decreased by 14.2% in real terms in the second quarter of 2020 from a year earlier, deteriorating from the 10.6% decline in the first quarter.
• Government consumption expenditure measured in national accounts terms grew by 9.8% in real terms in the second quarter of 2020 over a year earlier, after the increase of 8.8% in the first quarter.
• Gross domestic fixed capital formation (GDFCF) decreased by 21.4% in real terms in the second quarter of 2020 from a year earlier, compared with the decrease of 15.8% in the first quarter.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products decreased by 44.1% in real terms in the second quarter of 2020 from a year earlier, larger than the decline of 17.9% in the first quarter.
• On the other hand, expenditure on building and construction in GDFCF dropped by 3.6% in real terms in the second quarter of 2020 from a year earlier, after the decline of 11.5% in the first quarter.  Within this category, expenditure on building and construction in respect of private and public sectors decreased by 10.0% and increased by 14.2% respectively in real terms in the second quarter of 2020.
• Over the same period, total exports of goods recorded a decline of 2.4% in real terms from a year earlier, compared with the decrease of 9.7% in the first quarter.  Imports of goods dropped by 7.1% in real terms in the second quarter of 2020, compared with the decline of 11.1% in the first quarter.
• Exports of services fell significantly by 46.1% in real terms in the second quarter of 2020 from a year earlier, compared with the decrease of 37.4% in the first quarter.  Imports of services decreased by 42.9% in real terms in the second quarter of 2020, compared with the decrease of 24.5% in the first quarter.
• The implicit price deflator of GDP, as a broad measure of overall inflation in the economy, increased by 1.0% in the second quarter of 2020 over a year earlier, compared with the increase of 2.8% in the first quarter.
• As compared with the figures published in the last quarterly report, after incorporation of the latest information available, the year-on-year rate of change of GDP in real terms for the first quarter of 2020 was revised from -8.9% to -9.1%.  As compared with the advance estimates released on 29 July 2020, the year-on-year rate of change of GDP in real terms for the second quarter of 2020 remained at the decrease of 9.0%; and the real decline on a seasonally adjusted quarter-to-quarter comparison basis also remained unchanged.

GDP by economic activity for the first quarter of 2020

• The preliminary figures of chain volume measures of GDP by economic activity for the first quarter of 2020, which had already been released in late June 2020, 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 9.0% in real terms in the first quarter of 2020 from a year earlier, compared with the decrease of 2.4% in the fourth quarter of 2019.  In the first quarter of 2020, the net output of a number of services sectors dropped visibly from a year earlier.  The threat of COVID-19 seriously disrupted the regional supply chains and related trading activities.  Industries related to consumption and tourism were also hard hit.  Furthermore, the decline in the transportation industry was enlarged amid sharply reduced passenger and cargo flows.
• Analysed by constituent services sector and on a year-on-year comparison, net output in the import and export, wholesale and retail trades sector plunged by 21.5% in real terms in the first quarter of 2020 from a year earlier, after the decrease of 8.4% in the fourth quarter of 2019.
• Decrease in net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector enlarged further to 47.6% in real terms in the first quarter of 2020 from a year earlier, after the fall of 23.2% in the fourth quarter of 2019.
• Net output in the transportation, storage, postal and courier services sector plunged by 32.3% in real terms in the first quarter of 2020 from a year earlier, following the decline of 8.1% in the fourth quarter of 2019.
• Net output in the real estate, professional and business services sector decreased by 4.6% in real terms in the first quarter of 2020 from a year earlier, as against the marginal increase of 0.2% in the fourth quarter of 2019.
• Net output in the public administration, social and personal services sector dropped by 3.2% in real terms in the first quarter of 2020 from a year earlier, as against the growth of 2.5% in the fourth quarter of 2019.
• Net output in the information and communications sector increased by 1.6% in real terms in the first quarter of 2020 over a year earlier, compared with the growth of 2.8% in the fourth quarter of 2019.
• Net output in the financing and insurance sector increased by 2.7% in real terms in the first quarter of 2020 over a year earlier, compared with the 2.4% rise in the fourth quarter of 2019.
• As for sectors other than the services sectors, net output in the local manufacturing sector dropped by 4.6% in real terms in the first quarter of 2020 from a year earlier, compared with the decrease of 0.5% in the fourth quarter of 2019.
• Net output in the electricity, gas and water supply, and waste management sector decreased by 14.3% in real terms in the first quarter of 2020 from a year earlier, compared with the decrease of 1.1% in the fourth quarter of 2019.
• Net output in the construction sector decreased by 12.1% in real terms in the first quarter of 2020 from a year earlier, after the decrease of 6.6% in the fourth quarter of 2019.

GNI for the first quarter of 2020

• The preliminary figures of Gross National Income (GNI) for the first quarter of 2020, which were released in mid-June 2020, were also revised accordingly based on the revised GDP estimates.
• In the first quarter of 2020, GNI decreased by 7.3% from a year earlier to $677.6 billion at current market prices, compared with the 0.6% decrease in the fourth quarter of 2019.
• Measured at current market prices, the value of GNI was larger than GDP by $16.0 billion in the first quarter of 2020, 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 decreased by 10.1% in the first quarter of 2020 from a year earlier.
• Total primary income inflow into Hong Kong, estimated at $346.1 billion in the first quarter of 2020 and equivalent to 52.3% of GDP in that quarter, decreased by 6.3% from 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 decreased by 3.3%, 11.8%, 15.2% and 11.2% respectively from a year earlier.
• Total primary income outflow, estimated at $330.0 billion in the first quarter of 2020 and equivalent to 49.9% of GDP in that quarter, decreased by 4.7% from a year earlier.  Regarding the major components of total primary income outflow, DII, PII and OII decreased by 2.9%, 6.0% and 16.4% respectively from a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $16.0 billion was recorded in the first quarter of 2020, compared with the net income inflow of $22.9 billion in the fourth quarter of 2019.