In 2003, the Hong Kong economy grew by 3.3 per cent, faster than the 2.3 per cent growth in 2002. This was notwithstanding a severe setback in the second quarter upon the impact of SARS. Growth impetus came mainly from a sustained strong expansion in export trade throughout the year, yet a distinct revival in domestic demand during the second half of the year also contributed. The labour market continued to be slack in overall terms, but showed a notable improvement in the latter part of the year. Consumer prices drifted lower for the fifth consecutive year, albeit with a markedly narrowed decrease towards the year-end.