Hong Kong's Chan Says City's Economic Growth to Slow From 2015by
Challenges in exports, tourism: financial services secretary
`Big challenge to meet IMF's forecast for 2.5% economic growth
Hong Kong is expected to grow at a slower pace this year than in 2015 as the city’s economy is constrained by difficulties in its exports sector and lower spending by visiting tourists, according to the city’s top financial services official.
“Growth rate will be worse than last year,” K.C. Chan, Hong Kong’s secretary for financial services and the treasury, said in an interview with Commercial Radio Hong Kong on Saturday. “Our currency is expensive and economies in surrounding markets are starting to slow, so it’s clear that downward pressure on the economy is huge.”
Hong Kong’s GDP is estimated by economists to have grown 2.3 percent in 2015, the most sluggish since 2008 amid rising concerns about China’s slowdown and instability in global markets. The city’s currency spiked Friday as prospect of more stimulus from Japan and Europe ignited a global stocks rebound and curbed bets its peg to the greenback will end.
Hong Kong releases its 2015 GDP figures on Feb. 24. The government will announce its growth forecast for 2016 on the same day, Financial Secretary John Tsang said Friday.
An increasing proportion of Hong Kong’s businesses expect the current quarter to be more difficult than in the final three months of 2015, according to a survey by the Census and Statistics Department released Friday, with those in retail, import and export trading, and wholesale the most pessimistic.
The International Monetary Fund said in a Jan. 20 statement that risks to Hong Kong’s economy have limited impact given fiscal and financial buffers that are in place, and it forecast the city’s GDP to grow by 2.5 percent in 2016.
Meeting the IMF’s projection would be a “big challenge,” Chan said in Saturday’s interview. Delays by lawmakers in the Legislative Council in approving government infrastructure projects would make it difficult to meet the IMF estimate, he said. LegCo has so far approved one project, worth HK$100 million ($12.8 million), out of 72 totalling HK$67.5 billion, Chan said.
“In the past, when the economy was weak, the government very much relied much on public works projects to stimulate the economy,” Chan said at a media session after the radio interview. “If the projects aren’t approved, many construction workers and professionals may have no job to do. This is serious,” he said.