Hong Kong near-term economic outlook is “relatively weak” because of sluggish export demand, the Hong Kong Monetary Authority said.
The economy faces “downside risks, particularly for the external environment,” the de-facto central bank said yesterday in a report by its research department. “The latest reading of our in-house composite index of leading indicators also points to continued soft growth in the months ahead.”
Hong Kong’s economy is set for its weakest annual expansion since the global financial crisis as the European sovereign debt crisis damps global trade. The government in November cut its estimate for full-year growth to 1.2 percent from an August projection of a range of 1 percent to 2 percent.
The HKMA also reiterated concerns about the city’s “overheating” property market, as low interest rates encourage households to borrow excessively.
Home prices in Hong Kong, the world’s most expensive place to buy an apartment, have doubled in the past four years and surpassed a previous peak in 1997, on near record-low mortgage rates and an increase in buyers from other parts of China.