Hong Kong's real gross domestic product in the third quarter of 2024 increased by 1.8% year-on-year.

On November 15, the Hong Kong government's economic advisor Leung Wing-sang explained the economic performance in the third quarter of 2024 and the latest forecasts for the full-year Gross Domestic Product (GDP) and prices in 2024. The Hong Kong economy continued to expand year-on-year in the third quarter of 2024, although at a slower pace. Overall merchandise exports growth slowed down, while service exports further increased. Overall investment spending increased further. However, private consumption spending continued to decline. Real GDP grew by 1.8% year-on-year in the third quarter, compared to 3.2% growth in the previous quarter. For the first three quarters, real GDP grew by 2.6% year-on-year. After seasonal adjustment, real GDP fell by 1.1% in the third quarter. With economic growth slowing in some major markets, Hong Kong's overall merchandise exports grew by 4.0% year-on-year in the third quarter. Exports to mainland China continued to rise significantly. Exports to the United States grew at a slower pace, while exports to the European Union rebounded. However, exports to several major markets in Asia declined. Service exports further increased by 2.4%. Financial services, commercial and other services, and transport services exports continued to rise. Tourism services exports continued to decline due to changes in tourist spending patterns and the strong Hong Kong dollar. On the domestic front, overall investment spending increased by 3.7% year-on-year in the third quarter due to overall economic growth. However, private consumption spending continued to decline by 1.3% as consumer spending patterns changed. The labor market remained tight in the third quarter. The seasonally adjusted unemployment rate remained at a low level of 3.0%, the same as the previous quarter. The underemployment rate also remained unchanged at a low level of 1.2%. Employment income continued to show robust growth. As the United States lowered interest rates and uncertainties in the economic outlook of major economies, Hong Kong's local stock market remained soft in the third quarter. Following the US rate cut in September and subsequent stimulus measures from mainland China, market sentiment improved significantly. The Hang Seng Index (HSI) soared and closed at 21134 points at the end of the quarter, up 19.3% from the end of June. The residential property market remained subdued for most of the third quarter, but market sentiment improved after the US rate cut, prompting developers to launch new projects. Overall, trading activities decreased compared to the previous quarter, and residential prices remained soft. Consumer price inflation in the third quarter remained mild overall. The overall Consumer Price Index (CPI) rose by 1.1% year-on-year, compared to a 1.0% increase in the previous quarter. The year-on-year price increase for dining out and takeaway slowed down. The rental increase for private housing remained mild, while electricity prices continued to decline significantly. Other major components faced manageable price pressures. Despite the increasingly challenging global environment, it is expected that the Hong Kong economy will continue to maintain momentum for the remainder of the year. Uncertainties in the global economy and escalating trade tensions will impact Hong Kong's merchandise exports performance. However, expectations for further easing by major central banks, along with recent stimulus measures from the government, will help support the local market sentiment and activities. Specifically, the relaxation of financial conditions should support fixed asset investments. Measures from the central government to benefit Hong Kong, local government initiatives to boost the market, improved asset market sentiment, and increased employment income are expected to drive consumer and tourist spending in the local market, although changes in spending patterns will remain a constraint. The Policy Address 2024 has proposed a series of strong measures to develop the economy, consolidating and enhancing Hong Kong's traditional industries while actively exploring new growth points. In finance, the Policy Address proposed to establish Hong Kong as an international gold trading market to further consolidate Hong Kong's status as an international financial center. In shipping, the Policy Address proposed to build an ecosystem for commodity trading, boost maritime services, and support the development of financial and professional services such as futures hedging. In terms of trade, the Hong Kong government will focus on building a high-value-added supply chain service center to attract domestic and foreign companies to establish headquarters or branches in Hong Kong. The Policy Address also lowered the tax on liquor imports to encourage the development of liquor trade and related high-value-added services. Furthermore, in developing new productivity, the Policy Address proposed measures such as establishing a HK$ 10 billion innovation and technology industry guidance fund, and developing low-altitude economy. The Hong Kong government will fully implement the measures proposed in the Policy Address to inject new momentum into Hong Kong's economic development. Considering the actual figures for the first three quarters of this year and the latest developments in the global and local situation, the forecast for the real GDP growth for the full year of 2024 has been revised from 2.5% to 3.5% in August to 2.5%. In terms of inflation outlook, overall inflation is expected to remain mild in the short term. Continued economic growth in Hong Kong may bring some slight upward pressure on local costs. At the same time, external price pressures are expected to further ease, despite remaining uncertainties in the external environment. Considering the inflation situation in the first three quarters of this year and the factors mentioned above, the forecast for basic and overall consumer price inflation for 2024 has been revised downwards from 1.3% to 1.1% and from 1.9% to 1.7%, respectively.