HK's GDP forecast for 2003 revised up to 2 percent ( 2003-08-30 08:22) (Xinhua)
Hong Kong's economy was hit
by the Severe Acute Respiratory Syndrome (SARS), but not as badly as earlier
expected, said an economist on Friday.
Hong Kong government economist K.Y. Tang said that overall economic activity
in Hong Kong had begun to bottom out towards theend of May after SARS receded,
and had been turning progressively better in June, July and August.
With the GDP outturn in the second quarter being not as low as earlier
thought, and having regard to the current pace of upturn, the forecast growth
rate in real terms of GDP for 2003 is revised to 2 percent, half of a percentage
point up from the 1.5 percent growth forecast in the May update, according to
Tang.
The spread of SARS in Hong Kong since mid-March had dealt a heavy blow to the
economy, causing GDP in the second quarter of 2003 to slacken to a 0.5 percent
decline in real terms over a yearearlier, from a solid growth of 4.5 percent in
the first quarter.
On a seasonally adjusted quarter-to-quarter comparison, GDP fell visibly, by
3.7 percent in real terms in the second quarter of 2003, following a 0.3 percent
decline in the first quarter, according to the Half-yearly Economic Report 2003,
released by thegovernment on Friday.
The blow to inbound tourism and the travel-related sectors was most severe,
particularly in April and May. Even with some relative improvement in June,
exports of services for the second quarter of 2003 as a whole still plummeted by
14.7 percent in realterms over a year earlier, markedly down from the 12.6
percent increase in the first quarter. While offshore trade continued to grow
apace, it rendered only a partial offset.
Local consumer spending likewise went distinctly lower in April,yet turned up
steadily in May and June as the SARS threat receded.For the second quarter of
2003 as a whole, private consumption expenditure fell by 2.2 percent in real
terms over a year earlier,only slightly down from the 2.0 percent decline in the
first quarter. The setback was concentrated in residents' spending abroad, as
local people avoided visits to the SARS-affected places.
Investment spending slackened considerably, to a 5.3 percent decline in real
terms in the second quarter of 2003 over a year earlier, in contrast to a 3.5
percent increase in the first quarter. Building and construction output had an
enlarged decline amidst a weak property market, while machinery and equipment
intake also moderated markedly as business conditions faltered.
Yet total exports of goods were relatively unaffected by SARS, sustaining
double-digit growth all through the second quarter. After a 19.1 percent surge
in real terms in the first quarter of 2003 over a year earlier, there was a
further leap by 14.3 percentin the second quarter. The robust external trade
thus rendered a useful cushion to the economy against the setback in the
domestic sector.
As the fuller impact of SARS on the labor market set in, the seasonally
adjusted unemployment rate rose markedly, from 7.5 percent in the first quarter
of 2003 to 8.6 percent in the second quarter (and further to a new high of 8.7
percent in the three months ending July). The underemployment rate likewise
rose, from 2.9 percent to 4.3 percent between these two quarters (but edged down
to 4.2 percent in the three months ending July).
