Hong Kong’s exports surprisingly declined in May as trade with China continued to face disruptions from Covid and other global headwinds stalled momentum.
Overall exports slid 1.4% last month from a year earlier, reversing April’s 1.1% gain, the Census and Statistics Department said Monday. Economists had expected an improvement of 4.3%.
Imports rose 1.3% in May from a year earlier, also worse than economists’ forecast of a 4.8% expansion. The trade deficit was HK$36.7 billion ($4.7 billion), worse than estimates and the fourth straight month the city has recorded a deficit.
May’s decline in exports comes after an unexpected uptick improvement in April, when exports to China were still falling but not as severely as in March. This time around, trade with China fell 10.1%, worse than April’s 9.4% drop, the statistics bureau said.
The decline in the value of exports was attributed to “increasing headwinds” faced by the global economy, the statistics bureau quoted a government spokesman as saying.
“Looking forward, the worsened global economic prospects will continue to weigh on Hong Kong’s export performance,” the spokesman said, adding that increasingly tighter monetary policy by major central banks to curb inflation “will further dampen economic growth.” The US Federal Reserve this month raised interest rates by 75 basis points, the biggest increase since 1994, and Chair Jerome Powell has signaled another big move next month.
The Hong Kong government spokesman also cited the ongoing conflict in Ukraine and the “lingering threat of the pandemic” as added uncertainties.
