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Economy

Hong Kong's Q1 growth slips to slowest in a decade

Trade war squeezes container traffic and consumption

Hong Kong's Kwai Tsing Container Terminals. The continued U.S.-China trade war has put a dent in the city's economic growth.   © Reuters

HONG KONG -- Hong Kong's real gross domestic product rose 0.5% on the year in the January-March quarter, advance estimates released Thursday show, as the global trade hub took a heavy blow from the economic battle between the U.S. and China.

The economy expanded at the slowest rate since July-September 2009, and decelerated markedly from a 1.2% increase reported for the fourth quarter of 2018.

Consumption edged up 0.1% on the year last quarter, compared with a 2.7% gain in October-December, according to the estimates from Hong Kong's government. Exports of goods fell 4.2%, while imports dropped 4.6%.

The low GDP growth was caused by a sluggish global economy and various external factors, a government spokesperson said. Rapid growth in January-March 2018, which came to 4.6%, also left less room for improvement, according to the spokesperson.

Hong Kong's economy depends heavily on trade and real estate, and is particularly sensitive to economic trends in mainland China. Container traffic has been decreasing as businesses shift production from China to Southeast Asia and elsewhere to avoid U.S. tariffs.

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