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Hong Kong records 6.8pc growth in Q2

HONG KONG — Hong Kong’s economy grew 6.8 per cent in the second quarter compared with a revised 6.2 per cent increase in the previous quarter, official figures showed yesterday.

Figures also showed exports grew 8.1 per cent in July, resulting in a 11.1 per cent rise in the quarter thanks to the sustained expansion of the global economy and China’s strong trade flows.

Government economist KC Kwok said the global economy has been resilient so far in absorbing the impacts from the soaring oil prices and US interest rate up-cycle.

“The recent surge in oil prices to successive new highs is a key source of downside that could impinge on the global economic growth momentum in the period ahead,” Kwok said in a statement.

The government reiterated that the impact of the two per cent revaluation of China’s currency on Hong Kong’s re-export trade, mostly goods trans-shipped from China, is likely to be small, being cushioned to a large extent by the concurrent appreciation of the Asian currencies, he said.

Looking forward, “the trade outlook for the rest of the year is for a further solid growth in exports of both goods and services. Yet, the growth pace is likely to moderate somewhat as the impact of soaring oil prices increasingly sets in,” he cautioned.

Kwok maintained this year’s gross domestic product (GDP) forecast at 4.5-5.5 per cent although growth is likely to reach the upper end of the expectations given the upbeat assessment in the first half of 2005. Consumer price inflation remained moderate, averaging at 0.7 per cent and a further climb-up is expected in the coming months although local price pressures will be well contained throughout the year. Forecast of the price for the year is unchanged at 1.5 per cent.