Significant decline in exports of goods
 Hong Kong’s merchandise exports plunged 22.4% in value terms in the first two months of 2009, reflecting the increasingly severe impact of the financial tsunami on Hong Kong’s overseas markets. The short-term trade outlook is not promising, as many of Hong Kong’s major markets are now deep in recession and the global financial crisis is still evolving.
Retail sales weak as 2009 begins
Retail sales volume posted a moderate year-on-year decline of 3.6% in January and February combined, as the deepening global economic crisis continued to weigh on consumption spending.
Imports of capital goods fall
 Investment slowed significantly at 2008’s end amid the dimmer economic outlook. Overall investment expenditures fell 17.3% in the fourth quarter of 2008, with building and construction expenditures contracting further and acquisitions in machinery and equipment posing a notable decline. Stepping into 2009, imports of capital goods dropped 9.3% in value terms in the first two months combined.
Unemployment rate rises
 The labor market continued to worsen amid the economic downturn, with the seasonally adjusted unemployment rate reaching 5% in December 2008 - February 2009. The unemployment rate is expected to rise further in the coming months, as labor demand is expected to remain weak. There was also a rapid decline in wages amid the slackening labor market.
Residential property prices moderate
The residential property market stabilized on entering 2009 after a sharp correction in 2008, with prices rebounding mildly recently. The number of transactions also increased somewhat in recent months from the November 2008 trough.
Nevertheless, the number of apartment rentals fell further in February as the economy continued to slacken.
Underlying inflation continues to recede
Inflationary pressures eased notably further in the first two months of 2009, as both local and external price pressures receded on rapid deceleration in economic activities. The underlying consumer price inflation slowed to 3.3% in January and February combined, while the headline rate was a moderate 2%.
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