Hong Kong's economy contracted in the latest quarter as the weak global economy and poor local conditions weighed on the southern Chinese business hub.

Official data released Friday showed that gross domestic product contracted a seasonally adjusted 0.4 percent in the January-March period compared with the previous quarter.

Government economists said sluggish demand from advanced economies for Asian exports crimped global trade flows while volatile financial markets and uncertainty over central bank policies added to pessimism.

Falling retail sales, tourist visits and property prices took their toll on local sentiment.

The economy grew 0.8 percent when compared with the year-ago period, slower than the 1.9 percent growth in the previous period.

Officials forecast that Hong Kong's economy, a major hub for trade with China, would grow 1-2 percent in 2016.