Hong Kong's economy contracted for the third straight quarter in the three months ended September due to weaker external demand, the advance estimates from the Census and Statistics Department showed Monday.
Gross domestic product contracted 4.5 percent year-over-year in the third quarter, following a 1.3 percent fall in the second quarter. Economists had forecast an annual expansion of 0.7 percent.
Further, this was the worst contraction since the second quarter of 2020, when GDP had declined 9.4 percent.
On a seasonally adjusted quarter-to-quarter basis, real GDP fell by 2.6 percent, reversing a 1.0 percent expansion in the preceding quarter.
On the expenditure-side, private consumption remained unchanged annually in the September quarter, the same as that in the June quarter.
Gross fixed capital formation declined sharply by 14.3 percent over the year. Meanwhile, government spending grew 4.3 percent, but much slower than the 13.0 percent rise in the second quarter.
Total exports of goods fell 15.5 percent from a year ago, and imports slid by 16.0 percent.
Exports from Hong Kong were severely affected by the worsening external environment and disruptions to cross-border land cargo flows.
As a result of aggressive interest rate hikes by the major central banks, domestic demand has been adversely affected, although improved labor market conditions and the distribution of consumption vouchers in August have boosted private consumption, a government spokesman said.
"Looking ahead, the markedly deteriorating external environment will continue to pose immense pressure on Hong Kong's export performance in the remainder of the year."
"Nonetheless, the recent relaxation of the quarantine and testing arrangements for inbound visitors should help exports of services."
