Hong Kong’s economy grew modestly by 2.9% in Q3

Real GDP expanded by 0.5%.

According to a report, Hong Kong’s economy grew moderately in the third quarter, by 2.9% in real terms over a year earlier, compared with 3.2% in the second quarter.

On a seasonally adjusted quarter-to-quarter comparison, real GDP expanded by 0.5% in the third quarter, compared to 0.7% in the preceding quarter, Acting Government Economist Andrew Au said.

Total exports of goods grew by 6.2% in real terms in the third quarter over a year earlier.

Given the actual outturn of the 3% year-on-year real GDP growth in the first three quarters, and that further moderate growth is likely attainable in the fourth quarter, the real GDP growth for 2013 is now forecast at 3%, the mid-point of the range forecast of 2.5-3.5% announced in August.

As for domestic demand, private consumption expenditure rose by 2.8% in the third quarter over a year earlier, and investment expenditure also grew by 2.2%.

The unemployment rate stayed at 3.3%, and total employment hit another record high in the third quarter.

Local stock prices rebounded during the quarter as the Mainland’s economic indicators displayed resilience and the prospective Fed tapering did not start in September.

The property market remained quiet, with the increase in flat prices decelerating further amid thin trading during the quarter.

In the near term, uncertainties arising from the Fed’s monetary policy and unresolved fiscal issues will also put a drag on the pace of US growth. The eurozone’s recovery is likely to remain fragile, given the elevated unemployment rate and structural problems.

The Mainland economy has stayed resilient, supporting trade and production activity in Asia, and Hong Kong’s merchandise trade performance may continue to see some fluctuations in the near term.

The expansion of inbound tourism should also be conducive to the local consumption market.

Underlying consumer price inflation went up modestly to 4.3% in the third quarter, mainly due to private housing rental increases during 2012.

The forecast rates of headline and underlying consumer price inflation for 2013 are kept unchanged at 4.3% and 4%.