Information from the Statistics and Census Service (DSEC) indicated that Gross Domestic Product (GDP) in the first quarter of 2018 grew by 9.2% year-on-year in real terms, higher than the 8.0% rise in the previous quarter. Economic growth in the first quarter was mainly driven by exports of services and private consumption. External demand expanded further, which pushed up total exports of services by 16.0% year-on-year, with exports of gaming services and other tourism services growing by 16.5% and 19.6% respectively; meanwhile, exports of goods went up by 12.8%. Domestic demand recovered, with private consumption expenditure and government final consumption expenditure rising by 4.8% and 2.2% respectively year-on-year; meanwhile, investment declined slightly by 1.9%. The implicit deflator of GDP, which measures the overall changes in prices, went up by 3.4% year-on-year.
Private consumption expenditure showed significant growth. Increases in population and employment earnings drove private consumption expenditure up by 4.8% year-on-year, higher than the 2.7% rise in the previous quarter. Household final consumption expenditure in the domestic market and abroad increased by 5.3% and 3.0% respectively.
Government final consumption expenditure grew at a slower rate of 2.2% year-on-year, down from the 5.1% increase in the previous quarter, with compensation of employees and net purchases of goods and services rising by 2.5% and 1.6% respectively.
Due to an increase in government investment, gross fixed capital formation showed notable improvement, with the year-on-year decline tapering off substantially from 14.1% in the previous quarter to 1.9%. Government investment in fixed assets surged by 132.5%, underpinned by the increased investment in the Macao boundary crossing facilities for the Hong Kong-Zhuhai-Macao Bridge. On the other hand, private investment in fixed assets fell by 16.4% year-on-year following the completion of some large-scale tourism and entertainment facilities and dwellings; private construction investment contracted by 21.1% whereas equipment investment increased by 20.2%.
Merchandise trade remained buoyant. As the economy steadily resumed growth, total demand expanded constantly, with exports and imports of goods rising by 12.8% and 7.0% respectively year-on-year.
Exports of services performed satisfactorily and became the major driving force for economic growth. Increases in number of visitor arrivals and visitors' spending drove up total exports of services by 16.0% year-on-year. Exports of gaming services rose by 16.5%, a similar rate as in the previous quarter; meanwhile, exports of other tourism services went up by 19.6%, higher than the 15.4% growth in the previous quarter. Moreover, imports of services increased by 34.2% year-on-year.