Hong Kong_ Real GDP growth slowed notably in Q3 on larger goods trade deficit

Summary of the Conference Call on Hong Kong GDP Growth Q3 2024 Industry Overview - The report focuses on the Hong Kong economy, specifically the GDP growth for Q3 2024. Key Points and Arguments 1. GDP Growth Performance: - Hong Kong's real GDP growth for Q3 2024 was +1.8% year-over-year, significantly below the Bloomberg consensus forecast of +3.1% and Goldman Sachs' forecast of +3.0% [3][4][6] - Quarter-over-quarter, seasonally adjusted, real GDP fell by 1.1% in Q3 2024, compared to a growth of +0.3% in Q2 2024 [3][4][6] 2. Trade Deficit Impact: - The moderation in year-over-year growth was primarily attributed to a larger goods trade deficit in Q3 2024, which was driven by slowed goods export growth [3][11] - Goods export growth decreased to 3.9% year-over-year in Q3 2024 from 7.5% in Q2 2024, while goods import growth moderated to 2.6% from 3.4% [10] 3. Consumption and Investment Trends: - Private consumption declined by 1.4% year-over-year in Q3 2024, slightly improving from a decline of 1.6% in Q2 2024 [7] - Government consumption rose by 2.1% year-over-year in Q3 2024, contributing a 0.3 percentage point boost to GDP growth [9] - Investment growth, including inventory changes, contributed a 1.7 percentage point boost to GDP growth, mainly due to inventory restocking [9] 4. Future Outlook: - The outlook for goods export growth remains soft, influenced by uncertainties surrounding the upcoming US election [11] - Easing financial conditions due to Federal Reserve rate cuts are expected to potentially enhance consumption and investment growth in the upcoming quarters [11] - Full-year GDP growth forecasts for 2024 and 2025 have been revised down to 2.7% and 2.6%, respectively, from previous estimates of 3.2% and 2.5% [3][11] 5. Sector Performance: - Services export growth accelerated to 2.4% year-over-year in Q3 2024, compared to 1.1% in Q2 2024, although services import growth remained high at 8.2% [10] Additional Important Information - The preliminary GDP data is subject to revision, with more detailed information expected to be released by the government on November 15, 2024 [11] - The report emphasizes that the GDP figures should be considered as one of many factors in investment decision-making [7]