The Hong Kong Special Administrative Region (SAR) Government's Third Quarter Economic Report 1999 was published today (Friday), showing the recovery process in the Hong Kong economy, which began in the second quarter, had gathered further momentum during the period.

An initial assessment suggests that the Gross Domestic Product (GDP) should have attained a growth of around 4.5 per cent in real terms in the third quarter over a year earlier, up from the 0.7 per cent increase in the second quarter.

On a seasonally adjusted quarter-to-quarter basis, GDP should have expanded further by around 2 per cent in real terms in the third quarter, after rebounding to 3.1 per cent growth in the second quarter.

"For 1999 as a whole, GDP is now forecast at a growth of 1.8 per cent in real terms up from 0.5 per cent in the August round." the Government Economist, Mr. K.Y. Tang, said.

The factors for the latest rebound include:

• Exports of goods staged a notable growth of about 8 per cent in real terms in the third quarter of 1999 over a year earlier. This was a significant upturn, driven by the sharp rebound in exports of the Mainland of China, a general pick-up in demand in the East Asian economies, as well as a broad strengthening in import absorption in the United States and Europe.
  
  
• Exports of services likewise accelerated in growth, along with the regional economy recovery.
  
  
• Local consumer spending picked up further, in tandem with the recovery in overall economic activity and with the employment situation being generally stable. The volume of retail sales returned to a positive growth of 2 per cent in the third quarter of 1999 over a year earlier.
  
  
• Visitor arrivals continued to rise. Total arrivals for October was 999,771 - up 17.1 per cent, while the cumulative figure from January to October is 8,727,645, representing a growth rate of 11.8 per cent.
  
  
• Investment spending, on machinery and equipment tended to taper, while public sector building and construction output bounced back to positive growth thereby providing a partial offset to the continued slack in private sector building activity.
  
  
• The residential property market settled somewhat in the third quarter of 1999 following a marked upturn some months earlier. Trading activity was reduced while flat prices generally eased.
  
  
• The stock market also consolidated in the third quarter, but regained strength in the latter part of October upon improved market sentiment, and rallied to new post-crisis highs in November upon China's accord with the United States on its accession to the World Trade Organisation.