The economic recession deepened in Hong Kong in the first quarter of 2020, with real GDP contracting sharply by 8.9% from a year earlier, the steepest for a single quarter on record. Total exports of goods saw a visibly enlarged fall and exports of services plummeted. Domestic demand also weakened markedly, reflecting the serious disruptions caused by the threat of COVID-19 and subdued business sentiment. Considering the sharp economic contraction in the first quarter, the high uncertainties surrounding the pandemic, the difficult global economic situation, but also the cushioning effects of the massive relief measures rolled out by the Government, the real GDP growth forecast for 2020 as a whole has been revised downwards to -4% to -7%, as announced by the Financial Secretary on 29 April. The forecast rates of underlying and headline consumer price inflation for 2020 as a whole are revised downwards to 2.2% and 1.4% respectively.
|Link to press release of Gross Domestic Product|
Merchandise exports continued to decline in April from a year earlier, though the rate of decline narrowed slightly. Exports to the US and the EU continued to record double-digit falls as the COVID-19 situation remained serious in these markets. While exports to the Mainland increased visibly, those to many other Asian markets recorded decreases of varying degrees. Looking ahead, the global economy will remain sluggish until the COVID-19 pandemic is well contained. Hong Kong’s merchandise export performance is thus expected to remain under pressure in the near term.
|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 down to 2.3% in April, as price pressures on most major CPI components receded, offsetting the slight increase in food inflation.
Looking ahead, inflationary pressure is likely to ease further in the near term. Domestic cost pressures should continue to abate amid the severe economic recession. External price pressures are expected to subside further in view of the plunging global demand and the recent strengthening of the Hong Kong dollar along with the US dollar. The Government will continue to monitor the inflation situation closely, particularly the impact on the lower-income people.
|Link to press release of Consumer Price Indices|
The labour market showed further sharp deterioration as the COVID-19 pandemic continued to weigh on a wide range of economic activities. The seasonally adjusted unemployment rate soared by 1.0 percentage point to 5.2% in February – April 2020, the highest in over a decade. The underemployment rate likewise surged by 1.0 percentage point to 3.1%, the highest in over 15 years. The year-on-year declines in total employment and labour force widened further to 5.4% and 3.0% respectively, both the largest on record.
Looking ahead, the labour market will continue to face immense pressure in the near term. To preserve the vitality of the economy, the Government has rolled out relief measures of unprecedented scale, including a series of measures on job retention and job creation. These measures should help keep workers in employment. The Government will closely monitor the situation.
|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 year-on-year decline in retail sales remained huge in April, though narrower than that in March, reflecting the still-severe disruptions of COVID 19 and the necessary anti-epidemic measures to consumption- and tourism-related activities. While the epidemic has abated in Hong Kong, the business environment for retail trade remains challenging, as COVID-19 has brought inbound tourism to a standstill, and as austere labour market conditions and various uncertainties continue to weigh on consumption sentiment. The Government will monitor the developments closely.
|Link to press release of retail sales statistics|
Other Economic Indicators
|Link to press release of Year-end population for 2019|
|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|