The Hong Kong government may revise its 2012 economic forecast next month as the outlook for global growth deteriorates, Financial Secretary John Tsang said.
“We rely a great deal on our traditional markets in Europe and America” and “countries in Asia have also been slowing down,” Tsang told reporters yesterday after a radio interview, according to a government transcript.
“In August, I will make an assessment whether we need to adjust our forecast.”
Interest-rate cuts in China and Europe announced July 5 and lower-than-forecast employment gains in the U.S. underscore the fragility of the global recovery.
The International Monetary Fund will reduce its estimate for growth in the world economy this year, Managing Director Christine Lagarde said in Tokyo July 6.
Hong Kong’s economy grew 0.4 percent from a year earlier in the first quarter, the slowest pace since the global financial crisis, as Europe’s sovereign-debt woes undermined export demand and confidence.
The government is due to announce second-quarter gross domestic product on Aug. 10. The benchmark Hang Seng Index (HSI) has fallen 9 percent from this year’s peak in February amid concern growth in China and developed economies is slowing.
The city’s exports rose in May at half the pace of a year earlier as Asian demand failed to offset weakness in shipments to the U.S. and the European Union.
Retail sales expanded the least since 2009 as visitors from China cut back on purchases of luxury goods.
Think Carefully
Mainland shoppers “are not splashing out as much,” Wong Wai Sheung, chief executive officer of Hong Kong-listed jewelry retailer Luk Fook Holdings (International) Ltd., said at a briefing on June 28.
“I’m not too optimistic about the jewelry market this year.” The number of home transactions in Hong Kong fell 35 percent in June from a year earlier after a 14 percent drop in May, according to Land Registry statistics.
Tsang said yesterday the public needs to “think carefully when buying properties” because interest rates “can’t be lowered any further,” meaning borrowing costs will only trend upwards, adding to the repayment burden of home buyers.
Hong Kong’s residential housing prices have jumped more than 80 percent since early 2009 on the back of record-low mortgage rates and a lack of new supply.
Tsang estimated in his February budget speech that the city’s growth will cool in 2012, projecting a range of 1 percent to 3 percent for the full year.
The rate of expansion was 5 percent in 2011 after a 7 percent increase the previous year. He said on June 4 he may reduce the forecast because of a deterioration in the euro-area economy.
China Slows
China, the world’s second-largest economy announced its second cut in interest rates in a month ahead of the release of second-quarter growth data on July 13.
The central bank’s move may signal a worse-than-expected expansion in gross domestic product and June industrial output, according to Bank of America Corp. economists Lu Ting and Xiaojia Zhi.
China’s growth may have slid to 7.7 percent in the quarter ended June 30, the weakest in three years, according to the median estimate of 33 analysts surveyed by Bloomberg News.
The IMF will publish its updated outlook for the global economy including growth forecasts later this month.
bloomberg.com
“We rely a great deal on our traditional markets in Europe and America” and “countries in Asia have also been slowing down,” Tsang told reporters yesterday after a radio interview, according to a government transcript.
“In August, I will make an assessment whether we need to adjust our forecast.”
Interest-rate cuts in China and Europe announced July 5 and lower-than-forecast employment gains in the U.S. underscore the fragility of the global recovery.
The International Monetary Fund will reduce its estimate for growth in the world economy this year, Managing Director Christine Lagarde said in Tokyo July 6.
Hong Kong’s economy grew 0.4 percent from a year earlier in the first quarter, the slowest pace since the global financial crisis, as Europe’s sovereign-debt woes undermined export demand and confidence.
The government is due to announce second-quarter gross domestic product on Aug. 10. The benchmark Hang Seng Index (HSI) has fallen 9 percent from this year’s peak in February amid concern growth in China and developed economies is slowing.
The city’s exports rose in May at half the pace of a year earlier as Asian demand failed to offset weakness in shipments to the U.S. and the European Union.
Retail sales expanded the least since 2009 as visitors from China cut back on purchases of luxury goods.
Think Carefully
Mainland shoppers “are not splashing out as much,” Wong Wai Sheung, chief executive officer of Hong Kong-listed jewelry retailer Luk Fook Holdings (International) Ltd., said at a briefing on June 28.
“I’m not too optimistic about the jewelry market this year.” The number of home transactions in Hong Kong fell 35 percent in June from a year earlier after a 14 percent drop in May, according to Land Registry statistics.
Tsang said yesterday the public needs to “think carefully when buying properties” because interest rates “can’t be lowered any further,” meaning borrowing costs will only trend upwards, adding to the repayment burden of home buyers.
Hong Kong’s residential housing prices have jumped more than 80 percent since early 2009 on the back of record-low mortgage rates and a lack of new supply.
Tsang estimated in his February budget speech that the city’s growth will cool in 2012, projecting a range of 1 percent to 3 percent for the full year.
The rate of expansion was 5 percent in 2011 after a 7 percent increase the previous year. He said on June 4 he may reduce the forecast because of a deterioration in the euro-area economy.
China Slows
China, the world’s second-largest economy announced its second cut in interest rates in a month ahead of the release of second-quarter growth data on July 13.
The central bank’s move may signal a worse-than-expected expansion in gross domestic product and June industrial output, according to Bank of America Corp. economists Lu Ting and Xiaojia Zhi.
China’s growth may have slid to 7.7 percent in the quarter ended June 30, the weakest in three years, according to the median estimate of 33 analysts surveyed by Bloomberg News.
The IMF will publish its updated outlook for the global economy including growth forecasts later this month.
bloomberg.com
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