HK Update: HK GDP Weakest In Five Years
Hong Kong Q2 GDP narrowed to +4.2% y/y from 7.3% in Q1 (revised from 7.1%), weakest in nearly 5 years, and far below median forecast for +5.9% y/y. It represented -1.4% q/q SA, the first contraction since the SARS outbreak in 2003, and comes against the backdrop of growing nervousness about fallout from a global slowdown.
It interrupts what had been a strong expansion, featuring robust retail sales, supported by strong tourist arrivals, including spillover from the Chinese economy. The HK GDP continues a mixed bag of Q2 GDP reports out of Asia so far, with economies including China and Indonesia continuing strong, but Japan, Singapore and now HK reporting q/q contraction in Q2 in the face of global uncertainties.