Gross Domestic Product for 1st Quarter 2021

GDP by expenditure component for the first quarter of 2021

• In the first quarter of 2021, the Gross Domestic Product (GDP) increased by 7.9% in real terms over a year earlier, as against the decrease of 2.8% in the fourth quarter of 2020.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP increased by 5.4% in real terms in the first quarter of 2021 when compared with the fourth quarter of 2020.
• Analysed by major GDP component, private consumption expenditure increased by 1.6% in real terms in the first quarter of 2021 over a year earlier, as against the 6.9% decline in the fourth quarter of 2020.
• Government consumption expenditure measured in national accounts terms grew by 6.8% in real terms in the first quarter of 2021 over a year earlier, after the increase of 6.1% in the fourth quarter of 2020.
• Gross domestic fixed capital formation (GDFCF) increased by 4.5% in real terms in the first quarter of 2021 over a year earlier, compared with the increase of 3.6% in the fourth quarter of 2020.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products increased by 3.4% in real terms in the first quarter of 2021 over a year earlier, compared with the increase of 10.1% in the fourth quarter of 2020.
• On the other hand, expenditure on building and construction in GDFCF dropped by 5.0% in real terms in the first quarter of 2021 from a year earlier, after the decline of 4.9% in the fourth quarter of 2020. Within this category, expenditure on building and construction in respect of private and public sectors decreased by 16.5% and increased by 10.6% respectively in real terms in the first quarter of 2021.
• Over the same period, total exports of goods recorded an increase of 30.2% in real terms over a year earlier, much higher than the increase of 5.5% in the fourth quarter of 2020. Imports of goods grew by 22.7% in real terms in the first quarter of 2021, compared with the increase of 6.7% in the fourth quarter of 2020.
• Exports of services fell by 8.1% in real terms in the first quarter of 2021 from a year earlier, compared with the decrease of 28.8% in the fourth quarter of 2020. Imports of services decreased by 12.9% in real terms in the first quarter of 2021, compared with the decrease of 33.9% in the fourth quarter of 2020.
• The implicit price deflator of GDP, as a broad measure of overall inflation in the economy, decreased by 1.1% in the first quarter of 2021 from a year earlier, compared with the decrease of 1.2% in the fourth quarter of 2020.
• The reference year for the chain volume measures of GDP and its components has been revised from 2018 to 2019. Re-referencing affects the levels, but not the rates of change, of the chain volume measures. Apart from re-referencing, the volume estimates for 2020, which were previously valued at 2018 prices, have also been revalued at 2019 prices. This rebasing of the volume measures affects the real growth rates of the annual and quarterly GDP for 2020. These re-referencing and rebasing processes are annual updating exercises following the introduction of the annually re-weighted chain linking approach in compiling the volume measures of GDP.
• As compared with the figures published in the last quarterly report, after incorporation of the latest information available and rebasing of the volume estimates, the year-on-year rate of change of GDP in real terms recorded in the whole year of 2019 was revised from -1.2% to -1.7%. For 2020, the year-on-year rate of change of GDP in real terms for the fourth quarter was revised from -3.0% to -2.8%; while those for the first three quarters and the whole year remained unchanged. As compared with the advance estimates released on 3 May 2021, the year-on-year growth rate of GDP in real terms for the first quarter of 2021 was revised from 7.8% to 7.9%; whereas the real growth on a seasonally adjusted quarter-to-quarter comparison basis was revised from 5.3% to 5.4%.

GDP by economic activity for the fourth quarter of 2020 and the whole year of 2020

• The preliminary figures of chain volume measures of GDP by economic activity for the fourth quarter of 2020 and the whole year of 2020, which had already been released in late March 2021, 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 3.8% in real terms in the fourth quarter of 2020 from a year earlier, compared with the 5.1% decrease in the third quarter. While the decline in some industries narrowed in the fourth quarter of 2020, industries related to consumption and tourism still faced notable pressures amid the threat of COVID-19 pandemic. For 2020 as a whole, the net output decreased by 6.6% in real terms for all the services sectors taken together.
• Analysed by constituent services sector, net output in the import and export, wholesale and retail trades sector dropped by 6.4% in real terms in the fourth quarter of 2020 from a year earlier, after the decrease of 9.2% in the third quarter. For 2020 as a whole, net output in this sector saw a decrease of 13.7% in real terms.
• Net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector decreased by 32.9% in real terms in the fourth quarter of 2020 from a year earlier, after the fall of 44.9% in the third quarter. For 2020 as a whole, net output in this sector decreased by 42.0% in real terms.
• Net output in the transportation, storage, postal and courier services sector decreased by 35.2% in real terms in the fourth quarter of 2020 from a year earlier, following the decline of 41.7% in the third quarter. For 2020 as a whole, net output in this sector recorded a decrease of 39.5% in real terms.
• Net output in the real estate, professional and business services sector decreased by 3.7% in real terms in the fourth quarter of 2020 from a year earlier, compared with the decline of 4.9% in the third quarter. For 2020 as a whole, net output in this sector decreased by 5.3% in real terms.
• Net output in the public administration, social and personal services sector dropped by 1.6% in real terms in the fourth quarter of 2020 from a year earlier, compared with the 0.6% decrease in the third quarter. For 2020 as a whole, net output in this sector decreased by 2.1% in real terms.
• Net output in the information and communications sector increased by 2.3% in real terms in the fourth quarter of 2020 over a year earlier, similar to the growth of 2.2% in the third quarter. For 2020 as a whole, net output in this sector rose by 1.6% in real terms.
• Net output in the financing and insurance sector increased by 4.8% in real terms in the fourth quarter of 2020 over a year earlier, virtually the same as that in the third quarter. For 2020 as a whole, net output in this sector rose by 3.7% in real terms.
• As for sectors other than the services sectors, net output in the local manufacturing sector dropped by 6.1% in real terms in the fourth quarter of 2020 from a year earlier, compared with the decrease of 7.4% in the third quarter. For 2020 as a whole, net output in this sector dropped by 5.8% in real terms.
• Net output in the electricity, gas and water supply, and waste management sector decreased by 11.9% in real terms in the fourth quarter of 2020 from a year earlier, compared with the decrease of 11.0% in the third quarter. For 2020 as a whole, net output in this sector registered a decrease of 12.7% in real terms.
• Net output in the construction sector decreased by 1.4% in real terms in the fourth quarter of 2020 from a year earlier, after the decrease of 7.4% in the third quarter. For 2020 as a whole, net output in this sector decreased by 5.7% in real terms.

GNI for the fourth quarter of 2020 and the whole year of 2020

• The preliminary figures of Gross National Income (GNI) for the fourth quarter of 2020 and the whole year of 2020, which were released in mid-March 2021, were also revised accordingly based on the revised GDP estimates.
• In the fourth quarter of 2020, GNI decreased by 3.7% from a year earlier to $736.7 billion at current market prices, compared with the 2.0% decrease in the third quarter of 2020.
• Measured at current market prices, the value of GNI was larger than GDP by $26.8 billion in the fourth quarter of 2020, representing a net external primary income inflow of the same amount and equivalent to 3.8% of GDP in that quarter.
• After netting out the effect of price changes, real GNI decreased by 3.3% in the fourth quarter of 2020 from a year earlier.
• Total primary income inflow into Hong Kong, estimated at $348.4 billion in the fourth quarter of 2020 and equivalent to 49.1% of GDP in that quarter, decreased by 8.4% 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 0.6%, 8.1%, 51.7% and 31.4% respectively from a year earlier.
• Total primary income outflow, estimated at $321.6 billion in the fourth quarter of 2020 and equivalent to 45.3% of GDP in that quarter, decreased by 9.3% from a year earlier. Regarding the major components of total primary income outflow, DII, PII and OII decreased by 3.3%, 14.3% and 53.5% respectively from a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $26.8 billion was recorded in the fourth quarter of 2020, compared with the net income inflow of $44.8 billion in the third quarter of 2020.
• For 2020 as a whole, GNI decreased by 5.1% from a year earlier to $2,837.0 billion at current market prices. The difference of $148.4 billion from GDP for the same year represented a net external primary income inflow of the same amount and equivalent to 5.5% of GDP in that year. The total primary income inflow was estimated at $1,538.7 billion, or 57.2% of GDP in 2020 while the corresponding outflow at $1,390.2 billion, or 51.7% of GDP in 2020. After netting out the effect of price changes, GNI decreased by 5.8% in real terms in 2020 from 2019.