Hong Kong GDP Declines 1.4%

The economy of Hong Kong declined 1.4% compared to output of the first quarter, though GDP grew year over year.

Hong Kong's economic growth slowed more quickly than expected in the second quarter, showing its first quarter-to-quarter decline in five years as the effects of financial problems elsewhere spilled into the territory.

Gross domestic product dropped by 1.4% on a seasonally adjusted quarter-to-quarter basis -- the first such decline since the second quarter of 2003, when Hong Kong was hit by an outbreak of severe acute respiratory syndrome, which brought some segments of the economy almost to a halt.

The government said GDP rose by 4.2% when compared with the second quarter last year, but was down sharply from a revised figure of 7.3% for this year's first quarter as the territory started feeling the pinch from slowdowns in major economies and turbulence in financial markets.

A stock market that gets cut in half and declining commodity prices are no coincidences.