Gross Domestic Product for 1st Quarter 2019

GDP by expenditure component for the first quarter of 2019

• In the first quarter of 2019, the Gross Domestic Product (GDP) increased by 0.6% in real terms over a year earlier, compared with the increase of 1.2% in the fourth quarter of 2018.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP increased by 1.3% in real terms in the first quarter of 2019 when compared with the fourth quarter of 2018.
• Analysed by major GDP component, private consumption expenditure increased by 0.2% in real terms in the first quarter of 2019 over a year earlier, slower than the 2.7% growth in the fourth quarter of 2018.
• Government consumption expenditure measured in national accounts terms grew by 4.5% in real terms in the first quarter of 2019 over a year earlier, after the increase of 4.9% in the fourth quarter of 2018.
• Gross domestic fixed capital formation (GDFCF) continued to decrease, by 7.1% in real terms in the first quarter of 2019 from a year earlier, compared with the decrease of 5.8% in the fourth quarter of 2018.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products decreased by 1.8% in real terms in the first quarter of 2019 from a year earlier, as against the increase of 4.7% in the fourth quarter of 2018.
• On the other hand, expenditure on building and construction in GDFCF decreased by 3.5% in real terms in the first quarter of 2019 from a year earlier, after the decrease of 4.9% in the fourth quarter of 2018.  Within this category, expenditure on building and construction in respect of private and public sectors decreased by 3.9% and 2.8% respectively in real terms in the first quarter of 2019.
• Over the same period, total exports of goods recorded a decrease of 4.1% in real terms from a year earlier, compared with the virtually no change in the fourth quarter of 2018.  Imports of goods decreased by 4.7% in real terms in the first quarter of 2019, compared with the decrease of 0.5% in the fourth quarter of 2018.
• Exports of services rose by 1.1% in real terms in the first quarter of 2019 over a year earlier, slower than the growth of 3.3% in the fourth quarter of 2018.  Imports of services decreased by 0.8% in real terms in the first quarter of 2019, as against the increase of 2.1% in the fourth quarter of 2018.
• The implicit price deflator of GDP, as a broad measure of overall inflation in the economy, increased by 3.4% in the first quarter of 2019 over a year earlier, same as that in the fourth quarter of 2018.
• The reference year for the chain volume measures of GDP and its components has been revised from 2016 to 2017.  Re-referencing affects the levels, but not the rates of change, of the chain volume measures.  Apart from re-referencing, the volume estimates for 2018, which were previously valued at 2016 prices, have also been revalued at 2017 prices.  This rebasing of the volume measures affects the real growth rates of the annual and quarterly GDP for 2018.  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 for 2018, the year-on-year growth rates of GDP in real terms for the second and fourth quarters of 2018 were revised from 3.5% and 1.3% to 3.6% and 1.2% respectively, while those for the first and third quarters as well as the whole year remained unchanged.  As compared to the advance estimates released on 2 May 2019, the year-on-year growth rate of GDP in real terms for the first quarter of 2019 was revised from 0.5% to 0.6%; whereas the real growth rate on a seasonally adjusted quarter-to-quarter comparison basis was revised from 1.2% to 1.3%.

GDP by economic activity for the fourth quarter of 2018 and the whole year of 2018

• The preliminary figures of chain volume measures of GDP by economic activity for the fourth quarter of 2018 and the whole year of 2018, which had already been released in late March 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 increased by 2.4% in real terms in the fourth quarter of 2018 over a year earlier, compared with the 3.1% increase in the third quarter.  For 2018 as a whole, the net output saw an increase of 3.4% in real terms for all services sectors taken together.
• 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 2.0% in real terms in the fourth quarter of 2018 over a year earlier, slower than the growth of 5.2% in the third quarter.  For 2018 as a whole, net output in this sector recorded an increase of 4.5% in real terms, compared with the 4.2% growth in 2017.  The continued growth in this sector in 2018 was mainly underpinned by the solid growth in the merchandise trade and the further pick-up in retail trade.
• Net output in the financing and insurance sector increased by 3.5% in real terms in the fourth quarter of 2018 over a year earlier, after the growth of 3.6% in the third quarter.  For 2018 as a whole, net output in this sector rose by 4.6% in real terms, compared with the 5.7% growth in 2017.  The buoyant stock trading activities in early 2018 and active fund-raising activities rendered support to the continued growth in this sector in 2018.
• Net output in the accommodation services (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food services sector grew by 1.7% in real terms in the fourth quarter of 2018 over a year earlier, compared with the growth of 3.6% in the third quarter.  For 2018 as a whole, net output in this sector increased by 3.9% in real terms.
• Net output in the transportation, storage, postal and courier services sector registered an increase of 3.4% in real terms in the fourth quarter of 2018 over a year earlier, after the 1.4% growth in the third quarter.  For 2018 as a whole, net output in this sector recorded an increase of 3.5% in real terms.
• Net output in the information and communications sector increased by 4.9% in real terms in the fourth quarter of 2018 over a year earlier, following the growth of 3.4% in the third quarter.  For 2018 as a whole, net output in this sector rose by 3.8% in real terms.
• Net output in the real estate, professional and business services sector rose by 0.7% in real terms in the fourth quarter of 2018 over a year earlier, compared with the growth of 1.3% in the third quarter.  For 2018 as a whole, net output in this sector increased by 1.5% in real terms.
• Net output in the public administration, social and personal services sector increased by 3.2% in real terms in the fourth quarter of 2018 over a year earlier, compared with the growth of 3.0% in the third quarter.  For 2018 as a whole, net output in this sector increased by 2.9% in real terms.
• As for sectors other than the services sectors, net output in the local manufacturing sector rose by 1.2% in real terms in the fourth quarter of 2018 over a year earlier, virtually the same as that in the third quarter.  For 2018 as a whole, net output in this sector rose by 1.3% in real terms.
• Net output in the electricity, gas and water supply, and waste management sector dropped by 0.7% in real terms in the fourth quarter of 2018 from a year earlier, after the decrease of 4.6% in the third quarter.  For 2018 as a whole, net output in this sector recorded a marginal increase of 0.2% in real terms.
• Net output in the construction sector decreased by 4.4% in real terms in the fourth quarter of 2018 from a year earlier, as against the increase of 2.6% in the third quarter.  For 2018 as a whole, net output in this sector registered a marginal increase of 0.1% in real terms.

GNI for the fourth quarter of 2018 and the whole year of 2018

• The preliminary figures of Gross National Income (GNI) for the fourth quarter of 2018 and the whole year of 2018, which were released in mid-March 2019, were also revised accordingly based on the revised GDP estimates.
• In the fourth quarter of 2018, GNI increased by 4.7% over a year earlier to $774.1 billion at current market prices, compared with the 8.8% increase in the third quarter of 2018.
• Measured at current market prices, the value of GNI was larger than GDP by $19.1 billion in the fourth quarter of 2018, representing a net external primary income inflow of the same amount, and equivalent to 2.5% of GDP in that quarter.
• After netting out the effect of price changes, real GNI increased by 2.1% in the fourth quarter of 2018 over a year earlier.
• Total primary income inflow into Hong Kong, estimated at $386.1 billion in the fourth quarter of 2018 and equivalent to 51.1% of GDP in that quarter, increased by 9.6% 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 3.2%, 3.5%, 66.9% and 41.3% respectively over a year earlier.
• Total primary income outflow, estimated at $366.9 billion in the fourth quarter of 2018 and equivalent to 48.6% of GDP in that quarter, increased by 9.8% over a year earlier.  Regarding the major components of total primary income outflow, DII, PII and OII increased by 4.7%, 3.1% and 67.5% respectively over a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $19.1 billion was recorded in the fourth quarter of 2018, compared with the net income inflow of $41.7 billion in the third quarter of 2018.
• For 2018 as a whole, GNI increased by 7.4% over a year earlier to $2,984.5 billion at current market prices.  The difference of $141.6 billion from GDP for the same year represented a net external primary income inflow of the same amount and equivalent to 5.0% of GDP in that year.  The total primary income inflow was estimated at $1,627.7 billion, or 57.3% of GDP in 2018 while the corresponding outflow at $1,486.1 billion, or 52.3% of GDP in 2018.  After netting out the effect of price changes, GNI increased by 4.0% in real terms in 2018 over 2017.