HKU lifts HK 3Q GDP forecast to 2.2% from 1.7%

    Hong Kong's real GDP in 3Q 2015 is estimated to grow by 2.2% when compared with the same period in 2014, according to the APEC Studies Programme of the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong (HKU).
  This upward revision from the previous forecast release of 1.7% (July 7) partly reflects the stronger-than-expected growth in private consumption in 2Q 2015.
  In 4Q, real GDP growth is forecast to be 1.9% when compared with the same period last year.
  HKU believes amid the US recovery, higher money demand in US dollars translated into currency appreciation. As HK had adopted the linked exchange rate system with US dollars, the recent US dollar appreciation weakened Hong Kong's external trade competitiveness. China economic slowdown also held back economic growth. The recent monetary easing implemented in China will help stimulate the economy but its effect is likely to be long-term with variables. Consequently, Hong Kong's output growth will likely be driven by our domestic demand in the rest of 2015.
  Hong Kong economy is expected to grow by 2% in the second half of 2015, slowed from the 2.6% growth in the first half of 2015. The real GDP is forecast to grow by 2.3% for the year of 2015 as a whole. The real GDP growth is mainly driven by domestic demand. The increase in domestic demand is estimated to account for 2.6 percentage points of the overall increase in real GDP in current year, while the external demand is expected to contribute a negative 0.3 percentage point.