GDP Figures Improve

The city’s Gross Domestic Product (GDP) dipped 7.1 per cent for the second quarter of this year, according to the latest data released by the Statistics and Census Service (DSEC). Despite the drop, GDP posted a better performance than in the previous quarter, in which it contracted 13.3 per cent.
The DSEC indicates that the decline is due to a decrease in service exports and investment, as well as a lower comparison base from last year.
The amount of goods exported dropped by 24.7 per cent year-on-year as weak external demand continued to show similar rates as in the first quarter. The city’s export of gaming services and other tourism services also decreased, by 12 per cent and 7.4 per cent year-on-year, respectively.
Private expenditure decreases
Domestic demand continued to slow due to the city’s economic adjustment, notes the data published by the DSEC, with private expenditure falling 2.2 per cent year-on-year. Households tightened belts on non-essential items, causing a significant decrease in expenditure on durable goods.
The city’s overall investment declined, as evidenced by a 15.2 per cent year-on-year decrease in gross fixed capital formation, caused by a significant 18.4 per cent decrease in total private investment. This was mainly concentrated on construction and equipment, which saw subsequent 19.1 and 12.7 per cent year-on-year falls, respectively, as major tourism and entertainment related construction projects were completed in the quarter.
Government investment, however, increased by 41.7 per cent year-on-year for the quarter, driven by a 40 per cent increase in investment in public construction projects and a 59.5 per cent increase in equipment investment.
Contraction
Private spending was conducted more cautiously, demonstrating a 16.2 per cent year-on-year drop in the import of goods, further affected by fewer visitors spending in the city, although this was still a smaller drop than that seen in the first quarter.
Exports of services from the SAR also declined during the quarter, with a 9.5 per cent contraction, year-on-year, a slight recovery from the 13.7 per cent year-on-year drop seen in the first quarter, while the city’s import of services slowed, from the 4.8 per cent year-on-year rise of the first quarter to a 2 per cent year-on-year increase in the second quarter.