Q3 GDP: Hong Kong avoids recession

But the government said Hong Kong's trading environment was still subject to a high degree of uncertainty and revised its full-year 2012 GDP forecast to 1.2 percent from 1-2 percent, down sharply from 4.9 percent expansion in 2011.

Global economic turmoil and a slowdown in China have weighed on Hong Kong's economy, but analysts are more optimistic about the outlook for the financial centre on the back of encouraging data from China, which may help lift the city's export and retail sectors.

A flurry of Chinese data, from factory output, investment to trade last week, signalled the world's second-largest economy had turned a corner.

On a year-on-year basis, Hong Kong's gross domestic product (GDP) growth edged up 1.3 percent, compared with 1.2 percent expansion in the second quarter.

The pick-up in Hong Kong's economy is a combination of base effect, China recovery, slight recovery in the U.S. as well as iPhone5 and other technical gadget shipments, said Citi Group analyst Adrienne Lui, who expects full-year growth of 2.2 percent.

We do expect a bit more of a recovery at the end of the year, as trade gradually recovers in the region, some liquidity push to the system and therefore better sentiment, she said.

Exports in the former British territory in September grew 15.2 percent

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