May 15, 2012
(SCMP)
Hong Kong registered its lowest rate of economic growth in more than two years in the first quarter. The city's gross domestic product (GDP) grew just 0.4% from a year ago, sharply down on the 3% growth recorded in the final quarter of last year.
Much of the slowdown in Hong Kong can be traced to the Mainland, where consumer inflation eased last month, with the consumer price index (CPI) rising 3.4% year on year after gaining 3.6% in March. This and other data showed economic activity was slackening. While lower inflation possibly offers the authorities breathing space to loosen monetary policy, cross-border slowdown affected the city.
An economist says the weaker performance was mainly due to a lull in exports, reflecting a difficult external environment. Almost all Hong Kong exports are Mainland re-exports. The domestic sector was still strong and she expects the Hong Kong economy to pick up, helped by a stable Mainland economy and an improving US economy.
