The “One Country, Two Systems” Approach an Ideal Gateway for Singapore
Hong Kong’s Q2 economy grows 7.5% in 2021, an increase over the previous year. The growth indicates that Hong Kong’s economy is on the road to recovery with improving global economic conditions.
Among some of the growth that contributed to Hong Kong’s Q2 economy include private consumption expenditure. The growth in this category was 6.5%. Government expenditure consumption was also up by 2.9%. The gross domestic fixed capital formation went up to 23.7% compared to the previous quarter.
Other sectors that saw an increase were total goods exported and the goods imported. The growth was 20.3% and 21.4% respectively. Service exports saw a rise of 2.6% while import services rose to 8.4%. The total goods exported saw a strong growth that was underpinned by the stronger global demand.
Based on the GDP estimates, in comparison to the previous corresponding quarter, it shows that there’s a 1% decrease in the second quarter of 2021. Real GDP growth for the first half of 2021 was 7.8% compared to a year earlier. A 7.8% growth was recorded for the first half of 2021 over the previous year. But a minor decline was recorded in the second quarter of 2021. This decline in real GDP is the indication of a slowdown in goods exports when compared to the first quarter.
Tourism Still at a Standstill
Tourism is still at a standstill because of the Covid-19 pandemic. While activities related to consumption improved, it was still below the pre-recession levels. Thus, the Government is placing emphasis and encouraging all citizens to be vaccinated. This would pave the way for a much broader economic recovery.
The Hong Kong Government is still expecting the global economic recovery to continue supporting the city’s goods exports. Service exports are also expected to maintain their growth.
However, the economic outlook is still uncertain since it is unsure how the Covid-19 variants are expected to impact the economy. The uncertainty is also based on the shaky US-China relations and other geopolitical tensions.
Looking to Incorporate in Hong Kong? Find Out How We Can Help
Despite the uncertainty and risk factors on the international front, Hong Kong is confident its Consumption Voucher Scheme will help stimulate consumer sentiment. This, in turn, will support consumption-related sectors and contribute to the steady growth that Hong Kong has been experiencing so far.
Hong Kong is still one of Asia’s most sought-after business hubs. As businesses are slowly bouncing back, entrepreneurs are beginning to look toward this thriving hub once more. If you would like to start a Hong Kong company, 3E Accounting is here to help.
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