On-year GDP growth in the special administrative region slowed from 3.5 % in the second quarter to 2.9 % in the third quarter. In the first nine months of the year, GDP grew by 3.7 % y-o-y. The average on-year growth in Hong Kong since 2000 has been just under 3.9 %.
Hong Kong’s economic growth this year has been broad based. Retail sales have provided an important engine of growth. Thanks to a strong first half, retail sales were up by over 10 % this year. Industrial output, exports and tourism earnings all made positive gains. Thanks to a strong economy, the unemployment rate fell from 3.0 % at the end of 2017 to 2.8 % in October. In recent months, Hong Kong’s inflation rate has climbed to 2.7 %.
Business confidence indicators released by the NBS suggest that economic growth will continue to slow in the coming quarter. The growth outlook is clouded over the near and medium term by the slowdown in growth in mainland China, the US-China trade war and rising interest rates in the US. Shifts in American monetary policy impact Hong Kong instantly as the value of the Hong Kong dollar is pegged to the US dollar.