Hong Kong’s economy grew a less- than-estimated 3 percent in the fourth quarter from a year earlier as Europe’s debt crisis damped exports.
The expansion was the smallest in two years and compared with the 3.1 percent median forecast in a Bloomberg News survey of 12 economists. Financial Secretary John Tsang gave the number in his budget speech today. For the full year, growth was 5 percent.
Hong Kong may focus this year on supporting growth rather than limiting the risk of real-estate bubbles as property prices fall and exports falter. Chief Executive Donald Tsang said last week in Davos, Switzerland, that he has never been as scared about the global economic outlook, and UBS AG says the city may have a “shallow” recession in the first half.
A budget surplus will “help to shore up Hong Kong’s defenses in an increasingly volatile global financial environment,” Donna Kwok, an economist at HSBC Holdings Plc. in Hong Kong, said before Tsang’s speech. “The priority concern this year will be growth.”
UBS sees Hong Kong’s economy expanding 1.6 percent this year, while Standard Chartered Plc predicts growth of 2.9 percent.
Like China, the city has a property market that is cooling because of government curbs, with Barclays Capital predicting prices may decline as much as 25 percent by 2013.
The Hang Seng Property Index (HSP), which tracks the city’s seven biggest developers including Sun Hung Kai Properties Ltd. (16) and billionaire Li Ka-shing’s Cheung Kong Holdings Ltd. (1), fell 24 percent in 2011, after gaining more than 75 percent over the previous two years. It has risen about 13 percent this year.
To contact the reporter on this story: Sophie Leung in Hong Kong at email@example.com
To contact the editor responsible for this story: Paul Panckhurst in Hong Kong at firstname.lastname@example.org