Hong Kong’s economic recovery became more entrenched in the third quarter, with real GDP expanding further by 5.4% year-on-year alongside the continued revival of global economic activity and stable local epidemic situation. Exports of goods sustained notable year-on-year growth in the third quarter, while consumption-related activities revived further. However, inbound tourism remained virtually frozen, posing a constraint on the pace of economic recovery. Looking ahead, the global economic recovery should render further support to Hong Kong’s merchandise exports. However, the pandemic development especially the threat of the more infectious variants, together with supply bottlenecks in many economies, will continue to post downside risks to the global economic outlook. Moreover, the surge in energy prices and elevated inflation pressures in the US and Europe have cast uncertainties over the future course of major central banks’ monetary policies. Developments in China-US relations and geopolitical tensions also require attention. Locally, improving employment and income conditions, together with the Consumption Voucher Scheme, should remain supportive to consumption-related sectors in the near term. The revised economic forecasts for 2021 will be released on 12 November 2021.
The value of merchandise exports saw an accelerated year-on-year growth of 25.0% in November. Exports to the Mainland, the US and the EU all continued to grow notably, and those to other major Asian markets also showed double-digit increases. For the first eleven months of 2021 as a whole, total merchandise trade value amounted to $9,258.4 billion, surpassing the high in the same period in 2018 by 13.6%.
Looking ahead, the continued global economic recovery should remain supportive to Hong Kong’s export performance in the near term. Yet, the threat arising from the rapid spread of the Omicron variant in many places of late, together with the disruptions arising from supply bottlenecks, may weigh on global economic growth. Developments of China-US relations, monetary and fiscal policies in major economies, and geopolitical tensions also 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 went up to 1.4% in December 2021. Prices of meals out and takeaway food showed a widened year-on-year increase against a lower base of comparison a year earlier due to the fourth wave of local epidemic. The increase in prices of energy-related items accelerated further, and those of certain major CPI components such as clothing and footwear and transport were more visible. Nonetheless, price pressures on other major components remained moderate. For 2021 as a whole, the underlying consumer price inflation rate averaged 0.6%.
Looking ahead, external price pressures may increase further amid elevated global inflation and the pandemic-induced logistic disruptions. Yet, as the latest wave of local epidemic has weighed on some consumption-related activities and domestic cost pressures remain limited, the underlying inflation should stay broadly in check in the near term. The Government will continue to monitor the situation closely.
The labour market continued to improve in October – December 2021 amid the sustained economic recovery during the period. The seasonally adjusted unemployment rate went down by 0.2 percentage point from September – November 2021 to 3.9% in October – December 2021, and the underemployment rate edged down by 0.1 percentage point to 1.7%. Over the same period, total employment rose by 7 400 to 3 680 700, and the number of unemployed persons decreased by 14 700 to 143 300.
Looking ahead, with the new wave of local epidemic of late and the tightened social distancing measures in response, the employment situation of the consumption-related sectors could be subject to some pressure in the near term. Nevertheless, the latest round of measures under the Anti-epidemic Fund should provide some relief. The labour market developments in the coming months would hinge on the local epidemic situation and the pace of economic recovery. The community should abide by the anti-epidemic measures and strive towards wider coverage of vaccination, in order to put the local epidemic under control as swiftly as possible. 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
The value of total retail sales stayed above $30 billion in November, yielding a further year-on-year increase of 7.1%, as consumption sentiment remained positive thanks to the entrenched economic recovery and the Consumption Voucher Scheme.
Looking ahead, provided that the local epidemic situation remains under control, the improving economic and labour market conditions should continue to provide support to the retail sector. In order to strengthen the foundation for a faster and broader based economic recovery, it is essential for the community to strive towards more widespread vaccination and abide by the anti-epidemic measures.
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