ENG-2006 — Page 80

52 The Economy

capital goods surged throughout 2006,

throughout 2006, boosted by strong acquisition of telecommunications and office equipment. Retained imports of consumer goods, after a modest decline in 2005, also revived strongly in 2006, buoyed by bullish economic conditions which in turn boosted consumer spending. But retained imports. of raw materials and semi-manufactures fell further.

With the increase in the value of imports of goods exceeding that of exports, the visible trade deficit calculated on a GDP basis has grown in absolute terms from $59.3 billion or 2.6 per cent in 2005 to $109.0 billion or 4.2 per cent of the value of imports of goods in 2006.

Exports of services, which were on a sustained robust uptrend over the past several years, grew further by 8.9 per cent in real terms in 2006. Exports of trade- related services, comprising mainly offshore trade, surged at double-digit rate, underpinned by the Mainland's vibrant trade flows. The buoyant financial markets, boosted particularly by the growing number of IPOs and other fund-raising activities during the year, also saw double-digit growth in exports of financial services in 2006. Exports of travel services slowed quite noticeably in the latter part of the year because of a fall in the number of visitors to Hong Kong, but overall they were able to maintain growth throughout the year.

Imports of services grew by 6.4 per cent in real terms in 2006, after a 7.4 per cent growth in 2005. Imports of financial, business and other services showed double-digit growth in 2006, while imports of transportation services recorded solid growth during the year. Imports of travel services reverted to a mild increase in 2006, while growth in imports of trade-related services was moderate throughout the year (Chart 8).

Chart 8

Hong Kong's invisible trade

(year-on-year rate of change in real terms)

Per cent

20

15

10

บา

5

Exports of services

Imports of services

-5

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Exports of services sustained brisk growth in 2006, with double-digit growth recorded for exports of trade-related services and exports of financial services.