Hong Kong recorded a balance of payments deficit of HK$35.5 billion, which is 4.6 percent of the city’s gross domestic product, in the first quarter of 2024, data released by the Census and Statistics Department showed on Friday.

Reserve assets decreased correspondingly by the same amount, compared with a balance of payment deficit of HK$9.1 billion, or 1.1 percent of GDP, in the fourth quarter of last year, according to the preliminary balance of payments and international investment position statistics for Q1.

The authorities also recorded a current account surplus of HK$101.0 billion, which is 13.1 percent of GDP, in Q1 mainly due to the decrease in goods deficit and the increase in net inflow of primary income.

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“This reflects that Hong Kong's savings was greater than its investment, enabling Hong Kong to accumulate external financial assets, such as equity securities or debt securities, as a buffer against global financial volatilities,” the government said in a statement.

At the end of the first quarter of 2024, 56 percent of Hong Kong's external debt was attributable to the banking sector, the data showed

The primary income inflow and outflow amounted to HK$494.9 billion and HK$433.6 billion respectively, yielding a net inflow of HK$61.3 billion in the first quarter of this year, compared with a net inflow of HK$39.4 billion in the same quarter of 2023.

The government also recorded an overall increase in financial non-reserve assets amounting to HK$170.8 billion in Q1, compared with an increase of HK$46.5 billion in the previous quarter thanks to the net increases in portfolio investment, financial derivatives, and direct investment, partly offset by the net decrease in other investment.

The data also showed a reserve assets decrease by HK$35.5 billion in the first quarter of 2024, in comparison with a HK$9.1 billion fall in the fourth quarter of 2023.

At the end of Q1 of 2024, both external financial assets and liabilities of the city stood at a very high level, amounting to HK $49,051.1 billion, which is 16.2 times of GDP, and HK$34,990.2 billion, or 11.5 times of GDP, respectively.

According to the data, Hong Kong's gross external debt amounted to HK$14,409.5 billion at the end of the first quarter of 2024.

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Compared with HK$14,362.4 billion at the end of Q4 of 2023, gross external debt rose by HK$47.1 billion mainly due to the increases in external debt of other sectors and debt liabilities in direct investment, partly offset by the decrease in the banking sector’s external debt.

“As one of the world's major financial centers, Hong Kong has a significant amount of external debt held against the local banking sector arising through normal banking businesses,” the government said, adding that 56 percent of the city’s external debt at the end of Q1 of 2024 was attributable to the banking sector.