The Hong Kong economy recovered visibly in the first quarter of 2021, with real GDP resuming appreciable year-on-year growth of 7.9%, led by very strong growth of exports of goods. Yet the economic recovery was uneven and overall economic activity remained below the pre-recession level, as the pandemic, social distancing requirements and travel restrictions continued to weigh on certain economic segments. Looking ahead, the more benign global economic conditions should continue to bode well for Hong Kong’s external segments in the near term, though international travel and inbound tourism will likely take time to recover. The improved local business sentiment, coupled with the support from various government relief measures, should help domestic demand to improve in the period ahead. Considering that the economic recovery is uneven and the uncertainty associated with the pandemic is still high, the Hong Kong economy is forecast to grow by 3.5% to 5.5% in 2021. Underlying consumer price inflation is forecast at 1% in 2021.
Merchandise exports grew strongly on a year-on-year basis in April, with exports to many major markets showing visible gains. For the first four months of 2021 as a whole, the value of total merchandise trade was way higher than the previous high recorded in the same period in 2018, reflecting vibrant trading activities amid a sharp rebound in external demand.
Looking ahead, the sustained revival of the global economy should continue to render support to Hong Kong’s export performance in the near term. Yet, the evolving pandemic situation, along with other risk factors such as China-US relations and geopolitical tensions, still warrant attention. The Government will monitor the situation closely.
- Link to press release of external merchandise trade statistics
- Link to press release of volume and price statistics of external merchandise trade
The underlying consumer price inflation rate edged up to 0.3% in April, mainly reflecting higher local transportation prices amid the smaller MTR fare rebate and the bus fare increase. Meanwhile, price pressures on other major CPI components remained very mild.
Looking ahead, overall price pressures should stay mild in the near term as the local economy is still operating below its capacity. The Government will continue to monitor the situation closely.
The labour market saw some improvement lately as the local epidemic receded. The seasonally adjusted unemployment rate fell by 0.4 percentage point from January – March 2021 to 6.4% in February – April 2021, and the underemployment rate decreased by 0.5 percentage point to 3.3%. Meanwhile, total employment rose by 7 900 over the preceding three-month period to 3 622 000, and the number of unemployed persons went down by 12 300 to 247 500.
Looking ahead, considering that the business receipts of many labour-intensive sectors are still far below the pre-recession levels, the labour market will take time to attain a more visible recovery. Nonetheless, if the local epidemic remains well-contained, the pressure on the labour market will gradually ease in the period ahead. To create more favourable conditions for the revival of consumer-facing and tourism-related activities, it is essential for the community to work together to keep the epidemic under control and actively participate in the COVID-19 Vaccination Programme. The Government will continue to monitor the situation closely.
- Link to press release of unemployment and underemployment statistics
- Link to press release of employment and vacancies statistics
- Link to press release of wage and payroll statistics
Retail sales continued to grow visibly on a year-on-year basis in April due to a low base of comparison. Yet, retail sales volume was still far below its pre-pandemic level as inbound tourism remained frozen.
Looking ahead, as inbound tourism will likely take time to recover amid the evolving global pandemic, the near-term outlook for the retail trade is still challenging. It is essential for the community to actively participate in the COVID-19 Vaccination Programme so as to create favourable conditions for a more visible revival of the retail trade and other consumer-facing activities.
Other Economic Indicators
- Link to press release of annual survey of companies in Hong Kong with parent companies located outside Hong Kong
- Link to press release of Hong Kong's balance of payments and international investment position statistics