ENG-2014 — Page 74

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The Economy

performance, with the Indian and ASEAN markets faring visibly better. In terms of the quarterly profile, merchandise exports reverted from a 0.7 per cent year-on-year decline in the first quarter to growth of 3.4 per cent and 4.1 per cent respectively in the second and third quarters, before relapsing to a 0.8 per cent decline in the fourth quarter (Chart 6).

Chart 6

Hong Kong's Goods Trade (year-on-year rate of change in volume terms)

Per cent

35

30

25

Total exports of

20

goods

15

10

5

0

-5

-10

-15

-20

-25

Imports of goods

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013

2014 1

2010 |

2011 I 2012

1

Merchandise exports were still constrained by a slow-growing global economy in 2014.

Imports of goods, on merchandise trade statistics basis, rose moderately by 2.3 per cent in real terms in 2014, slightly down from the 3.6 per cent in 2013, as a result of the slower increases in both retained imports and import intake related to re-exports. Retained imports, which accounted for over one-quarter of total imports, grew by 4.5 per cent in real terms in 2014, lower than the 5.4 per cent increase in the preceding year. Analysed by end-use category, the deceleration in retained imports in 2014 was mainly driven by the notable declines in capital goods, reflecting the subdued investment expenditure during most of the year. Retained imports of fuels also fell, partly due to the weak demand from cargo transportation. On the other hand, retained imports of consumer goods and foodstuffs attained solid growth, as local consumption expanded further, though inventory replenishment might also have helped. Retained imports of raw materials and semi-manufactures reversed three consecutive years of declines and reported a notable gain.

Exports of services registered only modest growth, at a mere 0.5 per cent in real terms in 2014, visibly down from the 4.9 per cent growth in 2013. The main drag was the distinct slackening of exports of travel services, as visitor spending on luxury items fell from a high base of comparison. Exports of trade-related services grew modestly during most of 2014 amid tepid regional trade flows. Deterred by continued uncertainties in the global economy, exports of financial and other business services attained only mild growth. Transportation services fared

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