--Adds details, economist comments from 8th paragraph
HONG KONG, NNA - Hong Kong’s economic growth for the July-September quarter decelerated to a preliminary 2.9 percent on year, as expected, amid slower global growth and the escalating U.S.-China trade dispute.
The growth in the real gross domestic product in the third quarter moderated from 3.5 percent the previous quarter, government data showed Friday.
The average forecast of five economists polled by Reuters was 2.9 percent growth for July-September.
On a seasonally adjusted basis, GDP grew 0.1 percent on quarter after shrinking 0.2 percent in the second quarter.
“Looking ahead, the economic outlook is subject to increasing downside risks,” government economist Andrew Au said in a statement.
The global economy has lost some momentum and the U.S.-China trade is slowing Hong Kong exports, he said, adding that the trade impact is “likely to become more apparent in the near term.”
In light of the 3.7 percent GDP growth in the first three quarters of 2018 and increasing external downside risks, the government now expects Hong Kong’s economic growth for 2018 as a whole to be at 3.2 percent, within the 3 percent to 4 percent range projected in August.
Hong Kong’s economic growth peaked at 4.6 percent in the first quarter, a nearly seven-year high, said Ken Cheung Kin Tai, senior Asian forex strategist of Mizuho Bank.
“The rising Hong Kong rate, mounting uncertainties and weaker business confidence amid the China-U.S. trade tensions, and receding consumption given negative wealth effect in corrections in property and stock markets, will pose headwinds to growth in the fourth quarter,” he said.
The trade dispute as well as reduced liquidity in the mainland will continue to dampen sentiment in Hong Kong, said a private banker, who declined to be identified.
“The southbound capital flow into Hong Kong has been slowing since the trade dispute started,” he noted.