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HK economy drops 7.8% in Q1

HONG Kong's gross domestic product for the first quarter of this year fell 7.8 percent after a 2.6-percent drop in last year's fourth quarter, the Census and Statistics Department announced yesterday.

Taking into account the considerable mark-down in world economic outlook, the GDP for this year as a whole is now expected to contract by 5.5 to 6.5 percent in real terms, far worse than the decline of 2 to 3 percent earlier forecast in the government budget.

The latest GDP forecast is subject to an unusually large degree of uncertainty from the still evolving global financial and economic environments, the department said, adding the outbreak of the influenza H1N1 in North America has also emerged as a new source of uncertainty.

The expected pick-up in the Chinese mainland economy, the recent rebound in global stock markets, and the relative improvement in economic sentiment both in the United States and Europe have provided glimpses of light at the end of a long tunnel. However, a strong recovery is not yet in sight, according to the department. The marked deterioration in first-quarter performance, the department said, was due to an unprecedented fall-off in world trade.


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