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Hong Kong economy grows 0.4% in Q1

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Hong Kong's economy grew 0.4 per cent in the first quarter from the previous three months, matching the median estimate in a survey of analysts by Bloomberg.

[HONG KONG] Hong Kong's economy grew 0.4 per cent in the first quarter from the previous three months, matching the median estimate in a survey of analysts by Bloomberg.

That compares with a revised 0.2 per cent gain in the fourth quarter, the government said in a statement on Friday.

"Hong Kong's economy continued to grow at a sub-par pace at the start of 2015," Mole Hau, an economist at BNP Paribas SA in Hong Kong, said in a phone interview.

The government maintained its forecast for economic growth of 1 per cent to 3 per cent in 2015. Economists predict 2.6 per cent expansion, according to the median estimate of 27 analysts surveyed by Bloomberg.

"Domestic demand remained the key source of growth," the government said. "External demand was still lackluster, with goods exports expanding only marginally and with services exports, being dragged by the slowdown in inbound tourism, slackening further." The economy expanded 2.1 per cent in the first quarter from a year earlier, weaker than the revised 2.4 per cent expansion in October through December and matching economists' estimates.

Hong Kong saw its first monthly drop in visitors since June 2009 in March, when sales of jewelry, watches and clocks also fell for the sixth straight month.

The Hong Kong Tourism Board forecasts overall visitor arrival growth to slow to 6.4 per cent in 2015 from 12 percent last year, with mainland Chinese tourist arrivals decelerating to 8 per cent growth this year from 16 per cent in 2014.

BLOOMBERG