ENG-2019 — Page 69

Chapter 3

The Economy

Hong Kong's economy contracted in 2019 for the first time in a decade. It grew modestly in the first half of the year amid softening global growth and elevated Mainland-US trade tensions, and entered recession in the second half as local social incidents involving violence dealt a further heavy blow. The labour market slackened while overall inflationary pressures stayed largely moderate.

Gross Domestic Product (GDP) contracted 1.2 per cent in real terms for 2019 as a whole, the first annual decline since 2009, compared with the 2.8 per cent growth in 2018. In terms of the quarterly profile, real GDP grew modestly by 0.7 per cent year on year in the first quarter and 0.4 per cent in the second quarter, before shifting into consecutive quarterly declines of 2.8 per cent and 3.0 per cent (chart 1).

Chart 1

Quarterly Gross Domestic Product

(year-on-year rate of change)

Per cent

14

Real GDP

12

10

8

6

4

2

0

-2

-4

-6

-8

-10

Nominal GDP

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

The Hong Kong economy entered recession in the second half and contracted for the year as a whole.

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