Economic Situation in 2019
7. The external environment was exceptionally austere in 2019. Confronted by the slowdown in growth across most economies and US-China trade conflict, Hong Kong's total exports of goods fell by 4.7 per cent in real terms for the year as a whole. Hit by the violent social incidents, exports of travel services plunged and led to a fall of 10.4 per cent in exports of services for 2019 as a whole, the largest annual decline on record.
8. On domestic demand, private consumption expenditure began to weaken in the first half of 2019, and deteriorated abruptly in the second half of the year, resulting in a decline of 1.1 per cent in real terms for the year. Investment expenditure fell by 12.3 per cent in real terms amid subdued business confidence.
9. Hong Kong's economy was already quite weak in the first half of 2019. Dragged by a host of headwinds, the economy entered recession in the third quarter and contracted by 1.2 per cent for the year as a whole, the first annual decline since the great recession of 2009.
10. As the economic situation worsened, the labour market gradually slackened. The seasonally adjusted unemployment rate went up from 2.8 per cent in the second quarter of 2019 to the latest 3.4 per cent, the highest in more than three years. Employment situations in many sectors came under pressure. The unemployment rate of the retail, accommodation and food services sectors as a whole rose to a three-year high of 5.2 per cent. The unemployment rate of the food and beverage services sector even rose sharply to 6.1 per cent, the highest in eight years, and its underemployment rate also went up substantially. Besides, household incomes began to weaken in the second half of 2019.
11. Overall price pressures remained largely moderate. However, consumer price inflation went up in the second half of 2019, mainly reflecting the sharp increase in prices of basic foodstuffs amid reduced supply of fresh pork. Netting out the effects of the Government's one-off relief measures, the underlying inflation rate was 3 per cent for 2019, up 0.4 percentage point from 2018.
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