This picture taken with a fisheye lens shows people crossing a road in the Wan Chai district of Hong Kong on Oct 5, 2021.
(PETER PARKS / AFP)
HONG KONG – Hong Kong’s economy contracted by four percent in the first quarter of 2022 from a year earlier, the government said on Tuesday.
The decline of gross domestic product was attributable to weak domestic and external demand, according to a report released by the city’s Census and Statistics Department.
The government said Hong Kong’s economy faced immense pressure in the first quarter this year.
Externally, a moderating global demand growth and epidemic-induced cross boundary transportation disruptions posed substantial drags to exports. Domestically, economic activities as well as economic sentiment were hard hit by the fifth wave of local epidemic and the resultant anti-epidemic measures.
Total goods exports recorded a decline of 4.5 percent and goods imports decreased by 5.9 percent in the first quarter. Both exports and imports of services fell by 2.8 percent
On a seasonally adjusted quarter-to-quarter comparison, the city’s GDP dipped by 2.9 percent in real terms in the first quarter of 2022 compared with the preceding quarter, the government said, citing advance estimates.
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Private consumption expenditure dropped by 5.4 percent in real terms in the first quarter year-on-year, while government consumption expenditure grew by 5.9 percent. Gross domestic fixed capital formation decreased by 8.3 percent, deteriorating from the 0.6 percent decrease in the fourth quarter of 2021.
Over the same period, total goods exports recorded a decline of 4.5 percent and goods imports decreased by 5.9 percent. Both exports and imports of services fell by 2.8 percent.
With the central government’s support and the community’s effort, the local epidemic has been receding since early March, allowing for the gradual relaxation of social distancing measures, the government noted. That should help the revival of domestic demand in the remainder of 2022, it added
Rampant inflation has seen major central banks expedite their monetary policy tightening, weighing on the economic outlook.
“Furthermore, tensions in Ukraine will likely keep international energy and commodity prices high, aggravate supply chain disruptions and dampen economic sentiment,” the government said.
“At the same time, the evolving global pandemic and development of China-US relations will continue to pose uncertainty,” it added.
Nonetheless, with the central government’s support and the community’s effort, the local epidemic has been receding since early March, allowing for the gradual relaxation of social distancing measures, the government noted.
“This, together with the government’s various support measures, should help the revival of domestic demand in the remainder of 2022.”
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The improving local epidemic situation should also be conducive to the alleviation of cross-boundary transportation disruptions and hence the recovery of trading activities.
The revised GDP figures for the first quarter of 2022 and the whole year will be released on May 13, the government added.