Hong Kong GDP Up 9.6% In Q1

by Mary Swire, Tax-News.com, Hong Kong

18 June 2008

Hong Kong's first quarter gross national product rose to HKD427.3bn, up 6.5% on the same period last year, while gross domestic product, estimated at HKD409.3bn, rose 9.6%, the territory's Census and Statistics Department reported on Monday.

Compared with GDP, the value of Hong Kong's GNP grew by HKD18bn, representing a net external factor income inflow of the same amount, and equivalent to 4.4% of GDP in that quarter.

After netting out the effect of price changes, Hong Kong's GNP rose 4% in real terms. This was lower than the corresponding rise of 7.1% recorded for GDP.

Total factor income inflow into Hong Kong, estimated at HKD233.6bn and equivalent to 57.1% of GDP in that quarter, rose 21.8%. Total factor income outflow, estimated at HKD215.6bn and equivalent to 52.7% of GDP of the same period, grew 31.2%.

Taking the inflow and outflow together, a net external factor income inflow of HKD18bn was recorded.

Within total factor income inflow, direct investment income rose 43.3%, portfolio investment income grew 6.8%, but other investment income fell 15.6%. Within total factor income outflow, direct investment income, portfolio investment income and other investment income grew 36.9%, 52.8% and 2.9%.

Mainland China continued to be the largest source of Hong Kong's external factor income inflow in the first quarter, accounting for 33.6%. The British Virgin Islands came next with a share of 22.3%.

Other major sources were the UK and the US at 7.5% and 6.9%.

The Mainland and British Virgin Islands were still the most important destinations for Hong Kong's external factor income outflow, accounting for 29.9% and 21.7%. Other major destinations included the US at 9%, and the Netherlands at 8.8%.

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