Hong Kong expects 2.5% to 3.5% GDP growth for 2013

GDP improves 3.3% in Q2.

Hong Kong government upgraded its growth projections for 2013, citing improved domestic economic conditions in the second quarter despite external problems.

It raised the GDP growth forecast for 2013 to 2.5% to 3.5% from 1.5% to 3.5%. According to the Half-yearly Economic Report 2013, growth this year will likely be within the upper-half of the previously announced forecast range given the slightly reduced downside risks to the global economy.

The Census and Statistics Department said GDP grew by a more-than-expected 3.3% in the second quarter as favorable job and income conditions supported domestic spending.

Investment expenditure grew 6.9% after a brief dip in the first quarter, helped by a rise in machinery and equipment acquisition. Private spending rose 4.2%.

Export growth was rather modest after excluding the surge in non-monetary gold shipment and despite a 6.2% growth in exports. Quarter-on-quarter, GDP grew to 0.8% in the second quarter from 0.2% in the preceding three months.

Employment increased to a new high, pushing the jobless rate down to 3.3% in the second quarter. Wages and earnings also experienced further increases in recent periods.

Inflation is still expected to edge up in the coming months as the past increases in private housing rentals continue to feed through. Headline consumer price inflation forecast for 2013 was revised slightly downward to 4.3% from 4.5%.