The Census and Statistics Department (C&SD) released today (January 29) the advance estimates on Gross Domestic Product (GDP) for the fourth quarter and the whole year of 2020.
 
     According to the advance estimates, GDP decreased by 3.0% in real terms in the fourth quarter of 2020 from a year earlier, compared with the decrease of 3.6% in the third quarter of 2020. The moderation in the decline was attributable to the improvement in both domestic and external demand. For 2020 as a whole, GDP decreased by 6.1% in real terms from 2019.
 
     Analysed by major GDP component, private consumption expenditure (PCE) decreased by 7.6% in real terms in the fourth quarter of 2020 from a year earlier, smaller than the 8.2% decline in the third quarter. For 2020 as a whole, PCE decreased by 10.2% in real terms from 2019.
 
     Government consumption expenditure (GCE) measured in national accounts terms grew by 5.6% in real terms in the fourth quarter of 2020 over a year earlier, after the increase of 7.1% in the third quarter. For 2020 as a whole, GCE increased by 7.8% in real terms over 2019.
 
     Gross domestic fixed capital formation (GDFCF) increased by 2.6% in real terms in the fourth quarter of 2020 over a year earlier, as against the decrease of 10.9% in the third quarter. For 2020 as a whole, GDFCF decreased by 11.6% in real terms from 2019.
 
     Over the same period, total exports of goods measured in national accounts terms recorded an increase of 5.6% in real terms over a year earlier, compared with the increase of 3.9% in the third quarter. Imports of goods measured in national accounts terms grew by 6.9% in real terms in the fourth quarter of 2020, compared with the increase of 1.9% in the third quarter. For 2020 as a whole, total exports of goods and imports of goods recorded decreases of 0.3% and 2.1% respectively in real terms from 2019.
 
     Exports of services fell by 29.6% in real terms in the fourth quarter of 2020 from a year earlier, compared with the decrease of 33.5% in the third quarter. Imports of services decreased by 35.9% in real terms in the fourth quarter of 2020, compared with the decrease of 36.0% in the third quarter. For 2020 as a whole, exports of services and imports of services decreased by 36.8% and 35.2% respectively in real terms from 2019.
 
     On a seasonally adjusted quarter-to-quarter comparison basis, GDP increased by 0.2% in real terms in the fourth quarter of 2020 when compared with the third quarter.
 
Commentary
 
     A Government spokesman said that the Hong Kong economy recovered further in the fourth quarter of 2020, albeit at a slow pace due to the fourth wave of the local epidemic. The strengthening of exports of goods and active financial market activity continued to render support. According to the advance estimates, GDP fell by 3.0% in real terms in the fourth quarter of 2020 on a year-on-year comparison, narrowing slightly from the 3.6% decline in the third quarter. On a seasonally adjusted quarter-to-quarter comparison, real GDP grew mildly by 0.2% in the fourth quarter, having rebounded by 2.7% in the third quarter. 
 
     For 2020 as a whole, real GDP fell by 6.1%. As social stability in Hong Kong has been restored, the severe economic contraction last year was mainly due to the fallout from the COVID-19 pandemic. Consumption- and tourism-related sectors such as accommodation, food services and retail trade were particularly hard-hit by the pandemic and recorded much steeper contractions than the overall economy. In contrast, financial market activity stayed robust and activities relating to exports and imports of goods picked up visibly in recent periods. It is thus of pivotal importance for the community as a whole to spare no effort to fight the virus and keep the epidemic under control at the soonest possible in order to attain a broad-based economic recovery.
 
     Analysing the economic performance in the fourth quarter of 2020 by major expenditure component, Hong Kong's total exports of goods recorded accelerated growth thanks to the further revival of import demand in many major markets, especially the Mainland. Yet, exports of services plunged further as inbound tourism remained at a standstill. Regarding domestic demand, as the threat of COVID-19 and austere labour market conditions continued to weigh on consumer sentiment, private consumption expenditure stayed subdued though registered a slightly narrowed decline. Meanwhile, overall investment expenditure resumed growth against a low base of comparison after eight consecutive quarters of fall. 
 
     The Hong Kong economy is expected to see positive growth for 2021 as a whole, but the economic situation in the first half of the year will remain challenging and the degree and speed of recovery is subject to a host of uncertainties, especially those about the pandemic situation. While the Mainland economy is poised to strengthen further and render support to Hong Kong's exports, the pace of recovery in other major economies will hinge on the success of their mass vaccination campaigns. Evolving China-US relations and persistent geopolitical tensions also warrant attention. Locally, the prospect of domestic economic activities depends critically on how fast the local epidemic situation can be contained. The Government will monitor the situation closely and adopt appropriate countercyclical measures to support economic recovery and relieve people's financial burdens.
 
     The revised figures on GDP and more detailed statistics for the fourth quarter and the whole year of 2020, as well as the real GDP growth forecast for 2021 will be released on February 24, 2021 when the 2021-22 Budget is announced.
 
Further information
 
     The year-on-year percentage changes of GDP and selected major expenditure components in real terms from the fourth quarter of 2019 to the fourth quarter of 2020 are shown in Table 1. 
 
     When more data become available, the C&SD will compile revised figures on GDP.  The revised figures on GDP and more detailed statistics for the fourth quarter and the whole year of 2020 will be released at the C&SD website (www.censtatd.gov.hk/hkstat/sub/sp250.jsp), the Gross Domestic Product (Yearly) Report (www.censtatd.gov.hk/hkstat/sub/sp250.jsp?productCode=B1030002) and the Gross Domestic Product (Quarterly) Report (www.censtatd.gov.hk/hkstat/sub/sp250.jsp?productCode=B1030001) on February 24, 2021.
 
     For enquiries about statistics on GDP by expenditure component, please contact the National Income Branch (1) of the C&SD (Tel: 2582 5077 or email: gdp-e@censtatd.gov.hk).

     The Government announced today (January 29) its financial results for the nine months ended December 31, 2020.
 
     Expenditure for the period April to December 2020 amounted to HK$620.1 billion and revenue HK$351.3 billion, resulting in a cumulative year-to-date deficit of HK$268.8 billion.
 
     A Government spokesperson said that the cumulative year-to-date deficit for the period was mainly due to the fact that some major types of revenue, including salaries and profits taxes, are mostly received towards the end of a financial year, and the payments in respect of the Cash Payout Scheme and various measures under the Anti-epidemic Fund. The revised estimates for the current financial year will be published along with the 2021-22 Budget on February 24, 2021.
 
     The fiscal reserves stood at HK$891.5 billion as at December 31, 2020.
 
     Detailed figures are shown in Tables 1 and 2.
 
TABLE 1. CONSOLIDATED ACCOUNT (Note 1)
 

Government Debts as at December 31, 2020 (Note 3)
     HK$7,753 million
Debts Guaranteed by Government as at December 31, 2020 (Note 4)
     HK$72,316.7 million

TABLE 2. FISCAL RESERVES
 

Notes:

1. This Account consolidates the General Revenue Account and the following eight Funds: Capital Works Reserve Fund, Capital Investment Fund, Civil Service Pension Reserve Fund, Disaster Relief Fund, Innovation and Technology Fund, Land Fund, Loan Fund and Lotteries Fund. It excludes the Bond Fund, the balance of which is not part of the fiscal reserves. The Bond Fund balance as at December 31, 2020, was HK$150,832 million.

2. Includes transactions with the Exchange Fund and resident banks.

3. These were the Green Bonds of US$1,000 million (equivalent to HK$7,753 million as at December 31, 2020) which were denominated in US dollars with maturity in May 2024. They do not include the outstanding bonds with nominal value of HK$116,501 million and alternative bonds with nominal value of US$1,000 million (equivalent to HK$7,753 million as at December 31, 2020) issued under the Government Bond Programme (with proceeds credited to the Bond Fund). Of these bonds under the Government Bond Programme (including Silver Bonds with nominal value of HK$20,901 million, which may be redeemed before maturity upon request from bond holders), bonds with nominal value of HK$17,441 million will mature within the period from January 2021 to December 2021 and the rest within the period from January 2022 to March 2034.

4. Includes guarantees provided under the SME Loan Guarantee Scheme launched in 2001, the Special Loan Guarantee Scheme launched in 2008, the SME Financing Guarantee Scheme launched in 2012 and a commercial loan of the Hong Kong Science and Technology Parks Corporation.

5. Includes HK$219,691 million being the balance of the Land Fund held in the name of "Future Fund", for long-term investments initially up to December 31, 2025. The Future Fund also includes HK$4,800 million, being one-third of the actual surplus in 2015-16 as top-up.

The following is issued on behalf of the Hong Kong Monetary Authority:
 
     The Hong Kong Monetary Authority (HKMA) announced today (January 29) that the total assets of the Exchange Fund amounted to HK$4,500.8 billion as at December 31, 2020, HK$49.0 billion higher than that at the end of November 2020. Foreign currency assets increased by HK$40.3 billion and Hong Kong dollar assets increased by HK$8.7 billion.
 
     The rise in foreign currency assets was mainly due to the mark-to-market revaluation on foreign currency investments and an increase in unsettled purchase of securities. The rise in Hong Kong dollar assets was mainly due to the mark-to-market revaluation on Hong Kong equities.
 
     The Currency Board Account shows that the Monetary Base at the end of December 2020 was HK$2,098.0 billion, decreased by HK$11.6 billion, or 0.5 per cent, from the end of November 2020. The decline was mainly due to a decrease in the outstanding amount of Certificates of Indebtedness.
 
     The amount of Backing Assets decreased by HK$10.4 billion, or 0.4 per cent, to HK$2,306.3 billion. The decrease was mainly attributable to the redemption of Certificates of Indebtedness. The backing ratio increased from 109.82 per cent at the end of November 2020 to 109.93 per cent at the end of December 2020.
 
     The figures in the Exchange Fund Abridged Balance Sheet and the Currency Board Account are unaudited. The audit of the Exchange Fund's annual financial statements by the Director of Audit is in progress.
 
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     At present, four press releases relating to the Exchange Fund's data are issued by the HKMA each month. Three of these releases are issued to disseminate monetary data in accordance with the International Monetary Fund's Special Data Dissemination Standard (SDDS). The fourth press release, on the Exchange Fund's Abridged Balance Sheet and Currency Board Account, is made in accordance with the HKMA's policy of maintaining a high level of transparency. For the month of January 2021, the scheduled dates for issuing the press releases are as follows:
 

The following is issued on behalf of the Hong Kong Monetary Authority:
 
     The Hong Kong Monetary Authority (HKMA) released today (January 29) the analytical data on the Hong Kong Special Administrative Region's foreign currency reserves and foreign currency liquidity as at the end of December 2020 (Annex). These data are published monthly in the Template on International Reserves and Foreign Currency Liquidity in accordance with the International Monetary Fund's Special Data Dissemination Standard.
 
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     At present, four press releases relating to the Exchange Fund's data are issued by the HKMA each month. Three of these releases are issued to disseminate monetary data in accordance with the International Monetary Fund's Special Data Dissemination Standard (SDDS). The fourth press release, on the Exchange Fund's Abridged Balance Sheet and Currency Board Account, is made in accordance with the HKMA's policy of maintaining a high level of transparency. For the month of January 2021, the scheduled dates for issuing the press releases are as follows:
 

     The Government yesterday (January 28) exercised the power under the Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J) to make a "restriction-testing declaration" (declaration) effective from 7pm yesterday, by which people within the specified "restricted area" in North Point (i.e. Blocks A, B, C and D of Tung Fat Building, Kam Ping Street) were required to stay in their premises and undergo compulsory testing in accordance with the arrangement by the Government. Persons subject to compulsory testing were required to stay in their premises until all such persons identified in the area had undergone testing and the test results were mostly ascertained. Moreover, the Government issued a compulsory testing notice earlier, requiring persons who had been present in the building for more than two hours within the period specified in the notice, even if they were not present in the "restricted area" at the time when the declaration took effect, to undergo compulsory testing. The Government announced the completion of the compulsory testing exercise at around 7am today (January 29) and carried out enforcement actions in the "restricted area" afterwards to verify that all people in the "restricted area" had undergone compulsory testing. The Government announced that the enforcement operation ended at about 11.30am this morning.

     In this exercise, the Home Affairs Department (HAD), the Hong Kong Police Force, the Eastern District Office and the Auxiliary Medical Service (AMS) mobilised around 360 staff to arrange for implementation of the declaration and enforcement actions for breaches of the compulsory testing notice issued earlier.

     The Government provided simple food for persons subject to compulsory testing, including food packs (with instant noodles, pasta, canned food, etc), cup noodles, soup packs, soy milk, bread and bottled water, etc, so as to facilitate the dinner arrangement of some persons subject to compulsory testing. The HAD also set up a hotline for people restricted by the declaration to make enquiries and seek assistance. The hotline handled around 13 enquiries on the testing arrangement.

     The Government thanks persons subject to compulsory testing for their support and understanding. With everyone's co-operation and efforts, coupled with the tireless efforts of the testing contractors, residents have been informed about their testing results by SMS notification. After finishing the compulsory testing exercise at about 7am today, the Government took enforcement actions in the "restricted area" immediately to verify that all people in the "restricted area" have undergone testing. Persons who could present an SMS notification containing a negative testing result or wore a wristband as proof of having undergone the compulsory testing could leave the "restricted area" through the designated exit after providing personal information to a prescribed officer. The enforcement operation completed at about 11.30am. Fifteen persons were found not having undergone compulsory testing. A fixed penalty of $5,000 and a compulsory testing order were issued to them. Taking into account of the above situation, the Secretary for Food and Health revoked the "restriction-testing declaration" in accordance with Cap. 599J (see attachment).
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     The Government understands that quite some residents already underwent testing at the testing station set up at the road section between Pak Fuk Building's main entrance and Metropole Building's rear entrance from January 26 to 28. A total of 1 300 persons already undertook the test (including residents of Blocks A, B, C and D of Tung Fat Building; visitors and working staff.)

     The Government understands that residents in the district are worried and anxious because of the increase in confirmed cases in recent days. Under the epidemic, businesses in the area have been hit hard and brought to a standstill. Residents' livelihoods are also affected. The Government hopes this temporary inconvenience will completely cut the local transmission chains in the district and ease residents' worries and fear, so that they will regain confidence in resuming social and business activities in the area, and return to a normal life.

     The Government thanks all participating Government staff and the testing agencies for their hard work. The Government also thanks the persons subject to compulsory testing again for their support and understanding, and their full co-operation during this period in undergoing testing and waiting for the result at home.

     The Government as a whole is united in fighting against the virus despite all the difficulties, and provided testing for all the residents in the district within a short period of time in the hope of achieving zero cases in the district.

     The Government will seriously follow up on the compliance situation of the compulsory testing notices and the "restriction-testing declaration" by persons subject to compulsory testing. Any person who fails to comply with the compulsory testing notices commits an offence and may be liable to a fixed penalty of $5,000. The person will also be issued with a compulsory testing order, requiring him/her to undergo testing within a specified timeframe. Failure to comply with the order or the "restriction-testing declaration" is an offence and the offender may be liable to a fine of level 4 ($25,000) and imprisonment for six months.