Hong Kong’s GDP growth in Q4 was less than 1.5%, significantly lower than the 2.9% in the previous quarter, said the SAR’s Financial Secretary Paul Chan in a blog post on Sunday.
The trade war between the US and China and slowing retail sales dragged Hong Kong’s economic growth down at the end of last year, with exports showing almost "zero growth."
Though Hong Kong was never seen as getting hard hit by the US - China trade tensions, Chan said the impact of the trade war on Hong Kong’s exports of goods has clearly emerged at end-2018.
While exports dropped more than expected in December—the first time the number shrank in consecutive months since 2016, retail sales also missed estimates in the same month.
Chan puts the estimate for the growth of the entire year of 2018 at 3%, which is the lower end of the government’s forecast and the 3.2% projection in November.
The Financial Secretary will deliver his latest budget on Feb 27 with a revised surplus estimate for the full year and economic growth data for Q4 2018 as well as a 2019 forecast.
According to Chan, the budget surplus for the nine months through the end of 2018 was HK$59 billion ($7.5 billion), versus the HK$138 billion surplus in the previous financial year.
Hong Kong is not the only more advanced economy in Asia Pacific that expects slowdown in growth.
Singapore’s GDP growth slowed to 3.2% in 2018, compared with 3.9% in 2017, said the country’s Ministry of Trade and Industry (MTI) last week.
The country's GDP expanded 1.9% year-on-year in Q4, slower than the 2.4% in Q3
Citing factors including a looming Chinese slowdown, trade tensions between the US and its major trading partners, and the possibility of a no-deal Brexit., the MTI expects growth in 2019 to be below the mid-point of the 1.5% - 3.5% range.