The gross domestic product of Hong Kong decreased 2.2 percent year on year in the second quarter, the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR) government said Monday.

The GDP of Hong Kong decreased by 7.8 percent year on year in the first quarter, following a year-on-year decrease of 2.6 percent in the fourth quarter of 2008.

The Q2 GDP of Hong Kong was estimated to be 392.7 billion HK dollars (50.3 billion U.S. dollars), compared with the gross national product of 414.2 billion HK dollars (53.1 billion U.S. dollars), said the Census and Statistics Department.

After netting out the effect of price changes, the GNP of the free trade hub decreased by 3.7 percent year on year in the second quarter, and the GDP decreased by 3.8 percent year on year in the same quarter, it said.

Total factor income inflow into Hong Kong in the second quarter was estimated to be 215.1 billion HK dollars (27.6 billion U.S. dollars), with direct investment income decreasing by 13.1 percent year on year, mainly due to the decrease in earnings of local enterprises from investment outside Hong Kong.

Portfolio investment income dropped by 13.2 percent as a result of falling dividend income, and other investment income decreased by 65.1 percent mainly due to the significant decrease in the interest rates of the banking sector.

The Chinese mainland continued to be the largest source of Hong Kong's external factor income inflow in the second quarter, accounting for 40.3 percent.

The British Virgin Islands trailed with a share of 29.6 percent, reflecting continued investment income inflow from the tax haven economy where Hong Kong companies had set up a considerable number of holding companies.