Hong Kong’s 2021 Economy Grows with an Overall Rise of 6.4%
HK economy grows, indicating a reversal of the previous two years of decline.
Hong Kong’s Census & Statistics Department’s recent publication of advance estimates indicates quite a positive outlook. HK’s 2021 year-on-year 4.8% fourth-quarter growth sets the pace along with a 6.4% overall rise. This signifies that the declines of the past couple of years are firmly reversing as the economy grows once again.
The figures from the Department are advance estimates of 2021’s Gross Domestic Product (GDP). These fourth quarter and whole year GDP figures will reflect a further revision upon announcement of the 2022-23 Budget.
While the economy’s expansion looks encouraging, uncertainties due to COVID-19 still exist. Economic activities are in real danger of compromise if there is a tightening of anti-epidemic measures in the future. However, the Government is confident that by working together with the community, the potential for future growth is viable.
An Increase in Consumption Expenditures
The advance figures indicate that expenditure grew in both private and Government consumption estimates. With an overall growth of 4.6%, year-on-year estimates show Government consumption expenditure rose to 4.1% in 2021. In real terms, private consumption expenditure grew 6% in the fourth quarter. Whole year growth for this sector was at 5.7%
While the gross domestic fixed capital formation was at 0.1% year-on-year, it did expand by 10.1% in the whole year. This is good news for businesses and communities as the figures are rising as the economy grows.
In comparing total goods imports and exports to 2020, there were significant increases. Export service went up 5.7% while imports hit 5.1% for the fourth quarter. In 2021, imports and exports were surging at 9.7% and 13.3%, respectively. This is indicative of 17.5% and 19% growth, respectively, and a 1.9% and 0.8% rise in full for 2021.
A Robust Opportunity for Entrepreneurs
The Hong Kong Government is optimistic as the economy grows and heads towards recovery. However, the Government is cautious of the possible slow global economic recovery in 2022. Global supply disruptions and high inflation may affect local inflation figures, leading to volatile financial markets.
However, the advance figures of 2021’s fourth-quarter performance remain promising. This is due in large to the increases in private consumption and export performance. As this trend continues into 2022, entrepreneurs are in an ideal position to kick-start their ventures.
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