Hong Kong’s economic system grew by 3.1 % within the second quarter, in line with authorities estimates launched Thursday, beating expectations, with robust exports buoyed by companies racing to reap the benefits of US tariff easing.
Hong Kong is a particular administrative area in China with its personal commerce insurance policies, however continues to be susceptible to tariff threats from US President Donald Trump, because of its important re-exporting of Chinese language items.
Improved home demand coupled with a rise of 11.5 % in exports noticed the economic system “develop solidly”, a Hong Kong authorities spokesperson stated.
The “short-term easing of US tariff measures led to some ‘rush shipments'” which additionally helped progress, they added.
Earlier within the yr tariffs between China and the US reached triple digits earlier than a truce slashed them to extra manageable ranges.
A 90-day grace interval is supposed to finish on August 12, however the newest spherical of commerce talks ended Tuesday with out a deal.
The US president on Wednesday introduced tariffs on main buying and selling companions South Korea, Brazil and India — a sample Hong Kong’s authorities stated would additionally have an effect on its economic system within the second half of the yr.
“The US’ renewed tariff hikes of late will exert stress on international commerce flows in addition to its home financial exercise and inflation. The unsure tempo of US rate of interest cuts can even have an effect on funding sentiment,” the federal government spokesperson stated.
Thursday’s estimates confirmed personal consumption, which had declined for 4 consecutive quarters, elevated 1.9 %, whereas exports of providers noticed 7.5 % progress.
Hong Kong’s capital market has rebounded strongly this yr, with dozens of firms from China piling into town to lift abroad capital on account of coverage assist from the Chinese language authorities and optimised itemizing guidelines by Hong Kong regulators.
However China’s regulator this month accepted the fewest variety of itemizing purposes in eight months, Bloomberg reported, elevating issues that the IPO increase within the first half of this yr could also be slowing.
Hong Kong’s authorities warned that the second half of the yr might be more durable.
“Given the geopolitical panorama, there’s monumental uncertainty and volatility (for Hong Kong),” Monetary Secretary Paul Chan instructed a press convention on Wednesday.
Growth within the first quarter was three %, however however authorities have set a aim of two to a few % for the entire yr — which might be “prudent to maintain”, Chan stated.
“The seemingly modest progress has not been totally mirrored within the labour market,” Gary Ng, senior economist at Natixis Company and Funding Banking, instructed AFP.
“It’s exhausting to say the restoration is stable and shielded from geopolitical and commerce tensions.”
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