ENG-2018 — Page 67

Chapter 3

The Economy

The Hong Kong economy recorded another year of above-trend growth for 2018 as a whole. Strong growth was sustained in the first half of the year. In the face of easing global economic growth, the Mainland-US trade conflict and successive US interest rate hikes, growth decelerated visibly in the second half. Despite the external challenges, the labour market tightened further. Inflation rose but remained at a moderate level.

Gross Domestic Product (GDP) grew 3.0 per cent in real terms. While faster than the trend growth of 2.8 per cent over the past 10 years for the second year running, this was slower than the 3.8 per cent growth in 2017. In terms of the quarterly profile, real GDP grew visibly on a year-on-year basis by 4.6 per cent in the first quarter and 3.6 per cent in the second quarter, but the pace of growth moderated to 2.8 per cent in the third quarter and further to 1.2 per cent in the fourth quarter (chart 1).

Chart 1

Quarterly Gross Domestic Product (year-on-year rate of change)

Per cent

14

12

10

6

4

2

0

-2

-4

-6

Real GDP

Nominal GDP

Ay Masa

-8

-10

+

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

The Hong Kong economy recorded above-trend growth for the second year running in 2018, notwithstanding the deceleration in the second half.

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