3
The Economy
Compiled based on the change of ownership principle, the goods deficit widened somewhat in 2018 as imports of goods outpaced exports. As the services surplus was larger than the goods deficit, the combined goods and services account registered a slight surplus of $2 billion in 2018, compared with the surplus of $29 billion in 2017.
Domestic Demand
Domestic demand was broadly resilient in 2018. Private consumption expenditure grew notably by 5.5 per cent in real terms, slightly slower than the 5.6 per cent in 2017 (chart 7). The solid growth in wages and earnings continued to underpin local consumer sentiment. Nevertheless, the wealth effect from asset prices seemed to have turned from a boost to a drag over the course of the year along with the corrections in the local stock and property markets, and led to some moderation in the growth of private consumption expenditure in the second half. Government consumption expenditure grew 4.2 per cent in real terms in 2018, higher than its 2.8 per cent growth in 2017.
Chart 7
Main Components of Domestic Demand (year-on-year rate of change in real terms)
10
5
O
-5
Per cent
Investment expenditure in
-10
terms of gross domestic
fixed capital formation
Private consumption expenditure
Government consumption expenditure
-15
T
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
| 2014
2015
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 |
T 2018
2017
Private consumption expenditure maintained notable growth for 2018 as a whole, but the growth rate eased successively through the year. Investment expenditure recorded modest expansion.
Overall investment spending in terms of gross domestic fixed capital formation grew modestly by 2 per cent in real terms in 2018, following 2.9 per cent in 2017. Specifically, expenditure on acquisitions of machinery, equipment and intellectual property products picked up to grow 8.9 per cent, whereas building and construction expenditure contracted marginally by 0.6 per cent. Within the latter, private-sector activities recorded marginal growth while public-sector works fell modestly, albeit to a level that was still high. Separately, the costs of ownership transfer declined as trading activities in the property market quietened down, especially in the second half. It is worth noting that private-sector investment slackened sharply
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