Gross Domestic Product for 2nd Quarter 2019

GDP by expenditure component for the second quarter of 2019

• In the second quarter of 2019, the Gross Domestic Product (GDP) increased by 0.5% in real terms over a year earlier, compared with the increase of 0.6% in the first quarter.
• On a seasonally adjusted quarter-to-quarter comparison basis, GDP decreased by 0.4% in real terms in the second quarter of 2019 when compared with the first quarter.
• Analysed by major GDP component, private consumption expenditure increased by 1.1% in real terms in the second quarter of 2019 over a year earlier, faster than the 0.4% growth in the first quarter.
• Government consumption expenditure measured in national accounts terms grew by 4.2% in real terms in the second quarter of 2019 over a year earlier, after the increase of 4.5% in the first quarter.
• Gross domestic fixed capital formation (GDFCF) decreased significantly by 11.6% in real terms in the second quarter of 2019 from a year earlier, compared with the decrease of 7.0% in the first quarter.
• Within the total GDFCF, expenditure on machinery, equipment and intellectual property products decreased significantly by 12.4% in real terms in the second quarter of 2019 from a year earlier, compared with the decrease of 1.7% in the first quarter.
• On the other hand, expenditure on building and construction in GDFCF dropped by 10.6% in real terms in the second quarter of 2019 from a year earlier, after the decline of 3.5% in the first quarter.  Within this category, expenditure on building and construction in respect of private and public sectors decreased by 6.2% and 19.5% respectively in real terms in the second quarter of 2019.
• Over the same period, total exports of goods recorded a decrease of 5.6% in real terms from a year earlier, compared with the decrease of 3.7% in the first quarter of 2019.  Imports of goods decreased by 7.0% in real terms in the second quarter of 2019, compared with the decline of 4.2% in the first quarter.
• Exports of services decreased by 0.2% in real terms in the second quarter of 2019 from a year earlier, as against the growth of 0.8% in the first quarter.  Imports of services increased by 1.6% in real terms in the second quarter of 2019, as against the decrease of 1.5% in the first quarter.
• The implicit price deflator of GDP, as a broad measure of overall inflation in the economy, increased by 3.0% in the second quarter of 2019 over a year earlier, compared with the increase of 3.2% in the first quarter.
• As compared with the figures published in the last quarterly report, after incorporation of the latest information available, the value of GDP in the first quarter of 2019 was slightly revised and the year-on-year growth rate of GDP in real terms remained unchanged.  As compared to the advance estimates released on 31 July 2019, the year-on-year growth rate of GDP in real terms for the second quarter of 2019 was revised from 0.6% to 0.5%; whereas on a seasonally adjusted quarter-to-quarter comparison basis, the decrease in real terms was revised from 0.3% to 0.4%.

GDP by economic activity for the first quarter of 2019

• The preliminary figures of chain volume measures of GDP by economic activity for the first quarter of 2019, which had already been released in late June 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 1.9% in real terms in the first quarter of 2019 over a year earlier, compared with the 2.4% increase in the fourth quarter of 2018.
• 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 0.8% in real terms in the first quarter of 2019 from a year earlier, as against the increase of 2.0% in the fourth quarter of 2018.  This was mainly attributable to the setback in net output of the import and export trade sector amid the weaker performance of the global economy and various external headwinds during the quarter.
• Net output in the financing and insurance sector increased by 3.0% in real terms in the first quarter of 2019 over a year earlier, compared with the 3.5% rise in the fourth quarter of 2018.  Stock trading activities stayed active during the quarter, rendering support to the continued growth of net output 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 rose by 2.8% in real terms in the first quarter of 2019 over a year earlier, following the growth of 1.7% in the fourth quarter of 2018.
• Net output in the transportation, storage, postal and courier services sector increased by 2.4% in real terms in the first quarter of 2019 over a year earlier, compared with the 3.4% growth in the fourth quarter of 2018.
• Net output in the information and communications sector increased by 4.8% in real terms in the first quarter of 2019 over a year earlier, similar to the growth of 4.9% in the fourth quarter of 2018.
• Net output in the real estate, professional and business services sector rose by 1.7% in real terms in the first quarter of 2019 over a year earlier, compared with the growth of 0.7% in the fourth quarter of 2018.
• Net output in the public administration, social and personal services sector increased by 3.4% in real terms in the first quarter of 2019 over a year earlier, compared with the growth of 3.2% in the fourth quarter of 2018.
• As for sectors other than the services sectors, net output in the local manufacturing sector rose by 1.4% in real terms in the first quarter of 2019 over a year earlier, compared with the growth of 1.2% in the fourth quarter of 2018.
• Net output in the electricity, gas and water supply, and waste management sector dropped by 0.5% in real terms in the first quarter of 2019 from a year earlier, after the decrease of 0.7% in the fourth quarter of 2018.
• Net output in the construction sector decreased by 2.6% in real terms in the first quarter of 2019 from a year earlier, after the decrease of 4.4% in the fourth quarter of 2018.

GNI for the first quarter of 2019

• The preliminary figures of Gross National Income (GNI) for the first quarter of 2019, which were released in mid-June 2019, were also revised accordingly based on the revised GDP estimates.
• In the first quarter of 2019, GNI increased by 3.5% over a year earlier to $735.5 billion at current market prices, compared with the 4.7% increase in the fourth quarter of 2018.
• Measured at current market prices, the value of GNI was larger than GDP by $23.0 billion in the first quarter of 2019, representing a net external primary income inflow of the same amount, and equivalent to 3.2% of GDP in that quarter.
• After netting out the effect of price changes, real GNI increased by 1.0% in the first quarter of 2019 over a year earlier.
• Total primary income inflow into Hong Kong, estimated at $369.2 billion in the first quarter of 2019 and equivalent to 51.8% of GDP in that quarter, increased by 5.6% 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 2.1%, 1.3%, 27.5% and 32.2% respectively over a year earlier.
• Total primary income outflow, estimated at $346.2 billion in the first quarter of 2019 and equivalent to 48.6% of GDP in that quarter, increased by 6.4% over a year earlier.  Regarding the major components of total primary income outflow, DII, PII and OII increased by 3.0%, 20.3% and 28.7% respectively over a year earlier.
• Taking the inflow and outflow together, a net external primary income inflow of $23.0 billion was recorded in the first quarter of 2019, compared with the net income inflow of $19.1 billion in the fourth quarter of 2018.