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The Census and Statistics Department (C&SD) released today (June 23) the preliminary Balance of Payments (BoP) and International Investment Position (IIP) statistics of Hong Kong for the first quarter of 2014. The preliminary External Debt (ED) statistics of Hong Kong for the same period were also included in this release.
I. Balance of Payments
Hong Kong recorded a BoP surplus of $32.2 billion (as a ratio of 6.1% to GDP) in the first quarter of 2014, compared with a surplus of $44.8 billion (as a ratio of 7.7% to GDP) in the fourth quarter of 2013. Reserve assets correspondingly increased by the same amount in the first quarter of 2014.
Current account
The current account recorded a deficit of $6.2 billion (as a ratio of 1.2% to GDP) in the first quarter of 2014, compared with a deficit of $1.9 billion (as a ratio of 0.4% to GDP) in the same quarter of 2013. On a year-on-year comparison, the increase in the current account deficit in the first quarter of 2014 was due to an increase in the visible trade deficit, a decrease in the net inflow of primary income, and a slight increase in the net outflow of secondary income, partly offset by an increase in the invisible trade surplus.
With imports of goods increasing faster than exports of goods, the visible trade deficit increased to $74.9 billion in the first quarter of 2014, compared with the $67.6 billion in the same quarter of 2013. On the other hand, the invisible trade surplus increased to $66.2 billion in the first quarter of 2014, compared with the $57.9 billion in the same quarter of 2013, mainly due to an increase in exports of services. Overall, a combined visible and invisible trade deficit of $8.7 billion was recorded in the first quarter of 2014, smaller than that of $9.7 billion in the same quarter of 2013.
The primary income inflow and outflow amounted to $272.0 billion and $264.7 billion respectively, thus yielding a net inflow of $7.3 billion in the first quarter of 2014, compared with a net inflow of $12.6 billion in the same quarter of 2013.
The secondary income inflow and outflow amounted to $2.1 billion and $6.9 billion respectively, resulting in a net outflow of $4.9 billion in the first quarter of 2014, compared with a net outflow of $4.7 billion in the same quarter of 2013.
On a seasonally adjusted quarter-to-quarter comparison basis, the current account credit in the first quarter of 2014 decreased by 0.6% from the fourth quarter of 2013, whereas the current account debit increased by 0.4% during the same period.
Capital and financial account
In the first quarter of 2014, a small net outflow of $0.1 billion was recorded in the capital account, same as that in the fourth quarter of 2013.
An overall net inflow of financial non-reserve assets amounting to $62.2 billion (as a ratio of 11.7% to GDP) was recorded in the first quarter of 2014, as against an overall net outflow of $0.4 billion (as a ratio of 0.1% to GDP) in the fourth quarter of 2013. The overall net inflow recorded in the first quarter of 2014 was the result of a net inflow due to the cash settlement of financial derivatives and a net inflow of other investment, partly offset by a net outflow of direct investment and a net outflow of portfolio investment.
Direct investment recorded a net outflow of $82.3 billion in the first quarter of 2014, as against a net inflow of $45.7 billion in the fourth quarter of 2013. Portfolio investment recorded a net outflow of $11.5 billion in the first quarter of 2014, compared with a net outflow of $212.4 billion in the fourth quarter of 2013. Financial derivatives recorded a net inflow of $18.1 billion in the first quarter of 2014, compared with a net inflow of $1.0 billion in the fourth quarter of 2013. Other investment recorded a net inflow of $137.9 billion in the first quarter of 2014, compared with a net inflow of $165.2 billion in the fourth quarter of 2013.
In the first quarter of 2014, reserve assets increased by $32.2 billion, compared with an increase of $44.8 billion in the fourth quarter of 2013.
II. International Investment Position
At the end of the first quarter of 2014, Hong Kong's external financial assets and liabilities amounted to $29,414.8 billion and $22,950.9 billion respectively. After netting out the external financial liabilities from the external financial assets, Hong Kong was a net creditor. Hong Kong's net external financial assets amounted to $6,463.9 billion (as a ratio of 301% to GDP) at the end of the first quarter of 2014, compared with $5,951.2 billion (as a ratio of 280% to GDP) at the end of the fourth quarter of 2013.
The ratios of both Hong Kong's external financial assets and liabilities to GDP at the end of the first quarter of 2014 remained at very high level, at 13.7 times and 10.7 times respectively, reflecting that Hong Kong is a highly externally oriented economy and also a major financial centre in the region with considerable cross-territory investment.
External financial assets
Within the total value of external financial assets at the end of the first quarter of 2014, direct investment was the largest component, accounting for 35.7% ($10,488.5 billion) of the total value. Portfolio investment ($8,620.2 billion) and other investment ($7,245.8 billion) contributed 29.3% and 24.6% respectively.
External financial liabilities
Within the total value of external financial liabilities at the end of the first quarter of 2014, 46.9% ($10,757.1 billion) was in the form of direct investment. Other investment ($7,840.8 billion) and portfolio investment ($3,833.5 billion) contributed 34.2% and 16.7% respectively.
III. External Debt
At the end of the first quarter of 2014, Hong Kong's gross ED (measuring total outstanding gross external liabilities other than equity liabilities) amounted to $9,550.1 billion (as a ratio of 444% to GDP). Compared with $9,043.4 billion (as a ratio of 426% to GDP) at the end of the fourth quarter of 2013, gross ED increased by $506.7 billion. This was mainly attributable to the increase in ED of the banking sector.
Sectoral analysis
At the end of the first quarter of 2014, a major proportion of Hong Kong's ED was attributable to the banking sector, accounting for 71.1% of the total. Other ED mainly consisted of debt liabilities in direct investment (intercompany lending) (with a share of 15.2%) and ED of other sectors (13.5%).
ED of the banking sector increased from $6,302.3 billion at the end of the fourth quarter of 2013 (as a ratio of 297% to GDP) to $6,792.0 billion at the end of the first quarter of 2014 (as a ratio of 316% to GDP). ED attributable to debt liabilities in direct investment (intercompany lending), other sectors, the Government and the Hong Kong Monetary Authority amounted to $1,453.1 billion, $1,291.7 billion, $11.0 billion and $2.2 billion respectively at the end of the first quarter of 2014.
Further information
BoP is a statistical statement that systematically summarises, for a specific time period (typically a year or a quarter), the economic transactions of an economy with the rest of the world (i.e. between residents and non-residents).
IIP is a balance sheet showing the stock of external financial assets and liabilities of an economy at a particular time point. The difference between the external financial assets and liabilities is the net IIP of the economy, which represents either its net claim on or net liability to the rest of the world.
Gross ED, at a particular time point, is the outstanding amount of those actual current, and not contingent, liabilities that are owed to non-residents by residents of an economy and that require payment of principals and/or interests by the debtors at some time points in the future.
BoP and IIP statistics of Hong Kong are compiled in accordance with international standards as stipulated in the Sixth Edition of the Balance of Payments and International Investment Position Manual (BPM6) released by the International Monetary Fund (IMF) in 2009. ED statistics of Hong Kong are compiled according to the External Debt Statistics: Guide for Compilers and Users published by the Inter-agency Task Force on Finance Statistics chaired by the IMF. Concepts inherent in these two international guidelines are harmonised with each other.
Table 1 presents Hong Kong's BoP by standard component. Table 2 presents the detailed current account analysed by sub-account component, while Table 3 presents the detailed capital and financial account analysed by sub-account component. Table 4 shows Hong Kong's IIP by broad component, and Table 5 shows Hong Kong's ED by standard component.
Statistics on BoP, IIP and ED for the first quarter of 2014 are only preliminary figures, and are subject to revision upon the availability of more data.
Starting from the first quarter of 2014, seasonal adjustment of current account and its major components is performed using the X-12 ARIMA method. The seasonally adjusted data series backcasted to the first quarter of 1999 are presented in the Appendix of the report Balance of Payments, International Investment Position and External Debt Statistics of Hong Kong, First Quarter 2014 published by the C&SD. Users can download this publication free of charge at the website of the C&SD (www.censtatd.gov.hk/hkstat/sub/sp260.jsp?productCode=B1040001).
More details of the statistics of BoP, IIP and ED, together with the conceptual and methodological details, can also be found in the publication Balance of Payments, International Investment Position and External Debt Statistics of Hong Kong, First Quarter 2014.
For enquiries about the BoP, IIP and ED statistics, please contact the Balance of Payments Section of the C&SD (Tel: 2116 8660; fax: 2116 0278; email: bop@censtatd.gov.hk).
Ends/Monday, June 23, 2014
Issued at HKT 16:31
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