Hong Kong's Balance of Payments and International Investment Position statistics for fourth quarter of 2016 and whole year of 2016
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I. Balance of Payments
Hong Kong recorded a BoP surplus of $21.7 billion (as a ratio of 3.2% to GDP) in the fourth quarter of 2016, as against a deficit of $2.0 billion (as a ratio of 0.3% to GDP) in the third quarter of 2016. Reserve assets correspondingly increased by the same amount ($21.7 billion) in the fourth quarter of 2016.
For 2016 as a whole, there was a BoP surplus of $8.9 billion (as a ratio of 0.4% to GDP), compared with a surplus of $282.0 billion (as a ratio of 11.8% to GDP) in 2015.
Current account
On a year-on-year comparison, the current account recorded a surplus of $34.8 billion (as a ratio of 5.1% to GDP) in the fourth quarter of 2016, compared with a surplus of $27.4 billion (as a ratio of 4.2% to GDP) in the same quarter of 2015, mainly due to an increase in the net inflow of primary income, partly offset by an increase in the goods deficit and a decrease in the services surplus.
The goods deficit increased to $23.3 billion in the fourth quarter of 2016, compared with the $17.3 billion in the same quarter of 2015. This was due to a larger increase in imports of goods relative to that in respect of exports of goods. Over the same period, the services surplus decreased to $44.5 billion in the fourth quarter of 2016, compared with the $47.2 billion in the same quarter of 2015. This was due to a decrease in exports of services and an increase in imports of services. The overall balance on goods and services recorded a surplus of $21.1 billion in the fourth quarter of 2016, compared with a surplus of $29.9 billion in the same quarter of 2015.
The primary income inflow and outflow amounted to $310.4 billion and $291.0 billion respectively, thus yielding a net inflow of $19.4 billion in the fourth quarter of 2016, compared with a net inflow of $2.9 billion in the same quarter of 2015.
The secondary income inflow and outflow amounted to $2.6 billion and $8.4 billion respectively, resulting in a net outflow of $5.7 billion in the fourth quarter of 2016, compared with a net outflow of $5.3 billion in the same quarter of 2015.
On a seasonally adjusted quarter-to-quarter comparison basis, the current account credit and the current account debit in the fourth quarter of 2016 increased by 3.3% and 3.4% respectively from the third quarter of 2016.
For 2016 as a whole, the current account surplus was $112.5 billion (as a ratio of 4.5% to GDP), greater than that of $79.6 billion (as a ratio of 3.3% to GDP) in 2015, mainly due to a decrease in the goods deficit and an increase in the net inflow of primary income, partly offset by a decrease in the services surplus.
Capital and financial account
In the fourth quarter of 2016, a net outflow of $0.2 billion was recorded in the capital account, compared with a small net outflow of less than $0.1 billion in the third quarter of 2016.
An overall net outflow of financial non-reserve assets amounting to $44.3 billion (as a ratio of 6.5% to GDP) was recorded in the fourth quarter of 2016, compared with an overall net outflow of $77.8 billion (as a ratio of 12.2% to GDP) in the third quarter of 2016. The overall net outflow recorded in the fourth quarter of 2016 was the result of a net outflow of portfolio investment and a net outflow of other investment, partly offset by a net inflow of direct investment and a net inflow due to the cash settlement of financial derivatives.
Direct investment recorded a net inflow of $172.9 billion in the fourth quarter of 2016, compared with a net inflow of $157.4 billion in the third quarter of 2016. Portfolio investment recorded a net outflow of $177.7 billion in the fourth quarter of 2016, compared with a net outflow of $213.7 billion in the third quarter of 2016. Financial derivatives recorded a net inflow of $3.9 billion in the fourth quarter of 2016, compared with a net inflow of $6.2 billion in the third quarter of 2016. Other investment recorded a net outflow of $43.3 billion in the fourth quarter of 2016, compared with a net outflow of $27.7 billion in the third quarter of 2016.
In the fourth quarter of 2016, reserve assets increased by $21.7 billion, as against a decrease of $2.0 billion in the third quarter of 2016.
For 2016 as a whole, a net outflow of $0.4 billion was recorded in the capital account, compared with a net outflow of $0.2 billion in 2015.
An overall net outflow of financial non-reserve assets amounting to $113.6 billion (as a ratio of 4.6% to GDP) was recorded in 2016, as against an overall net inflow of $153.6 billion (as a ratio of 6.4% to GDP) in 2015. The overall net outflow recorded in 2016 was the result of a net outflow of portfolio investment and a net outflow of other investment, partly offset by a net inflow of direct investment and a net inflow due to the cash settlement of financial derivatives.
Direct investment recorded a net inflow of $354.5 billion in 2016, compared with a net inflow of $794.8 billion in 2015. Portfolio investment recorded a net outflow of $325.6 billion in 2016, compared with a net outflow of $970.9 billion in 2015. Financial derivatives recorded a net inflow of $28.6 billion in 2016, compared with a net inflow of $99.2 billion in 2015. Other investment recorded a net outflow of $171.1 billion in 2016, as against a net inflow of $230.5 billion in 2015.
In 2016, reserve assets increased by $8.9 billion, compared with an increase of $282.0 billion in 2015.
II. International Investment Position
At the end of the fourth quarter of 2016, Hong Kong's external financial assets and liabilities amounted to $35,497.2 billion and $26,342.2 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 $9,155.0 billion (as a ratio of 368% to GDP) at the end of the fourth quarter of 2016, compared with $8,772.5 billion (as a ratio of 357% to GDP) at the end of the third quarter of 2016.
The ratios of both Hong Kong's external financial assets and liabilities to GDP at the end of the fourth quarter of 2016 remained at a very high level, at 14.3 times and 10.6 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 fourth quarter of 2016, direct investment was the largest component, accounting for 37.6% ($13,356.8 billion) of the total value. Portfolio investment ($10,614.9 billion) and other investment ($7,700.8 billion) contributed 29.9% and 21.7% respectively.
External financial liabilities
Within the total value of external financial liabilities at the end of the fourth quarter of 2016, 52.6% ($13,844.8 billion) was in the form of direct investment. Other investment ($8,326.5 billion) and portfolio investment ($3,383.5 billion) contributed 31.6% and 12.8% respectively.
III. External Debt
At the end of the fourth quarter of 2016, Hong Kong's gross ED (measuring total outstanding gross external liabilities other than equity liabilities) amounted to $10,313.2 billion (as a ratio of 414% to GDP). Compared with $10,375.4 billion (as a ratio of 422% to GDP) at the end of the third quarter of 2016, gross ED decreased by $62.1 billion. The decrease was mainly attributable to ED of the banking sector, partly offset by the increase in ED of other sectors.
Sectoral analysis
At the end of the fourth quarter of 2016, a major proportion of Hong Kong's ED was attributable to the banking sector, accounting for 64.9% of the total. Other ED mainly consisted of ED of other sectors (19.1%) and debt liabilities in direct investment (intercompany lending) (15.8%).
ED of the banking sector decreased from $6,873.0 billion at the end of the third quarter of 2016 (as a ratio of 280% to GDP) to $6,689.9 billion at the end of the fourth quarter of 2016 (as a ratio of 269% to GDP). ED of other sectors, debt liabilities in direct investment (intercompany lending), and ED of the Government and the Hong Kong Monetary Authority amounted to $1,969.9 billion, $1,631.9 billion, $18.5 billion and $3.0 billion respectively at the end of the fourth quarter of 2016.
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 released by the International Monetary Fund (IMF) in 2009. ED statistics of Hong Kong are compiled according to the 2013 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 fourth quarter of 2016 and the whole year of 2016 are only preliminary figures, and are subject to revision upon the availability of more data.
More details of the statistics of BoP, IIP and ED, together with the conceptual and methodological details, are presented in the publication Balance of Payments, International Investment Position and External Debt Statistics of Hong Kong, Fourth Quarter 2016 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).
For enquiries about the BoP, IIP and ED statistics, please contact the Balance of Payments Section of the C&SD (Tel: 3903 6979; fax: 2116 0278; email: bop@censtatd.gov.hk).
Ends/Thursday, March 23, 2017
Issued at HKT 16:30
Issued at HKT 16:30
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