Hong Kong’s economy moderates in the year 2011 amid the European crisis and weak U.S. economy. Thanks to the robust consumption and investment, it still enjoys around 5 percent growth for the whole year, higher than most of the developed economies.
Looking ahead, economists cut further their forecasts for Hong Kong’s growth in 2012 as external demand may continue to wither. However, with the support from the central government, it is believed the region’s economy is resilient enough to avoid recession.
2011: GROWTH SLOWING DOWN
Amid European debt crisis and slackened U.S. economy, Hong Kong’s economy has performed reasonably well in the year 2011, mainly driven by solid consumption and a strong labor market.
The region’s economy grew 7.5 percent, 5.3 percent and 4.3 percent in real terms respectively in the first, second and third quarter of the year over a year earlier. Toward the end of the year, the economy was forecast to grow 5 percent for 2011 as a whole, the lower boundary of the earlier range forecast of 5 percent to 6 percent.
The growth moderation was mainly caused by a sharp fall-off in exports in the second half of the year due to an increasingly austere global economic environment. Total exports of goods slackened in the third quarter with export to the U.S. and European markets further decreasing. The ensuing deceleration in regional production resulted in a notable fall-off in Hong Kong’s raw material exports to Asia, thereby exacerbating further the weakness in overall export performance.